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entitled 'Project Bioshield: Actions Needed to Avoid Repeating Past
Problems with Procuring New Anthrax Vaccine and Managing the Stockpile
of Licensed Vaccine' which was released on October 23, 2007.
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Report to Congressional Requesters:
United States Government Accountability Office:
GAO:
October 2007:
Project Bioshield:
Actions Needed to Avoid Repeating Past Problems with Procuring New
Anthrax Vaccine and Managing the Stockpile of Licensed Vaccine:
Project Bioshield:
GAO-08-88:
GAO Highlights:
Highlights of GAO-08-88, a report to congressional requesters.
Why GAO Did This Study:
The anthrax attacks in September and October 2001 highlighted the need
to develop medical countermeasures. The Project BioShield Act of 2004
authorized the Department of Health and Human Services (HHS) to procure
countermeasures for a Strategic National Stockpile. However, in
December 2006, HHS terminated the contract for a recombinant protective
antigen (rPA) anthrax vaccine because VaxGen failed to meet a critical
contractual milestone. Also, supplies of the licensed BioThrax anthrax
vaccine already in the stockpile will start expiring in 2008. GAO was
asked to identify (1) factors contributing to the failure of the rPA
vaccine contract and (2) issues associated with using the BioThrax in
the stockpile. GAO interviewed agency and industry officials, reviewed
documents, and consulted with biodefense experts.
What GAO Found:
Three major factors contributed to the failure of the first Project
BioShield procurement effort for an rPA anthrax vaccine. First, HHS’s
Office of the Assistant Secretary for Preparedness and Response (ASPR)
awarded the procurement contract to VaxGen, a small biotechnology firm,
while VaxGen was still in the early stages of developing a vaccine and
had not addressed many critical manufacturing issues. This award
preempted critical development work on the vaccine. Also, the contract
required VaxGen to deliver 25 million doses of the vaccine in 2 years,
which would have been unrealistic even for a larger manufacturer.
Second, VaxGen took unrealistic risks in accepting the contract terms.
VaxGen officials told GAO that they accepted the contract despite
significant risks due to (1) the aggressive delivery time line for the
vaccine, (2) VaxGen’s lack of in-house technical expertise—a condition
exacerbated by the attrition of key company staff as the contract
progressed—and (3) VaxGen’s limited options for securing any additional
funding needed.
Third, important Food and Drug Administration (FDA) requirements
regarding the type of data and testing required for the rPA anthrax
vaccine to be eligible for use in an emergency were not known at the
outset of the procurement contract. In addition, ASPR’s anticipated use
of the rPA anthrax vaccine was not articulated to all parties clearly
enough and evolved over time. Finally, according to VaxGen, the
purchase of BioThrax for the stockpile as a stopgap measure raised the
bar for the VaxGen vaccine. All these factors created confusion over
the acceptance criteria for VaxGen’s product and significantly
diminished VaxGen’s ability to meet contract time lines. ASPR has
announced its intention to issue another request for proposal for an
rPA anthrax vaccine procurement but, along with other HHS components,
has not analyzed lessons learned from the first contract’s failure and
may repeat earlier mistakes. According to industry experts, the lack of
specific requirements is a cause of concern to the biotechnology
companies that have invested significant resources in trying to meet
government needs and now question whether the government can clearly
define future procurement contract requirements.
GAO identified two issues related with the use of the BioThrax in the
Strategic National Stockpile. First, ASPR lacks an effective strategy
to minimize the waste of BioThrax. Starting in 2008, several lots of
BioThrax in the Strategic National Stockpile will begin to expire. As a
result, over $100 million per year could be lost for the life of the
vaccine currently in the stockpile. ASPR could minimize such potential
waste by developing a single inventory system with DOD—a high-volume
user of BioThrax—with rotation based on a first-in, first-out
principle. DOD and ASPR officials identified a number of obstacles to
this type of rotation which may require legislative action. Second,
ASPR planned to use three lots of expired BioThrax vaccine in the
stockpile in the event of an emergency. This would violate FDA rules,
which prohibit using an expired vaccine, and could also undermine
public confidence because the vaccine’s potency could not be
guaranteed.
What GAO Recommends:
GAO is recommending that the HHS Secretary ensure that (1) for future
procurements the concept of use and all critical requirements for
medical countermeasures are clearly articulated at the outset, (2)
expired stockpile vaccines are destroyed, and (3) the HHS and the
Department of Defense (DOD) Secretaries develop an integrated stockpile
for BioThrax with rotation based on a first-in, first-out principle.
HHS and DOD generally concurred with GAO’s recommendations but
identified legal challenges that may require legislative action.
To view the full product, including the scope and methodology, click on
[hyperlink, http://www.GAO-08-88]. For more information, contact Keith
Rhodes at (202) 512-6412 or rhodesk@gao.gov
[End of section]
Contents:
Letter:
Scope and Methodology:
Results in Brief:
Background:
Several Factors Contributed to the Failure of ASPR's First Project
BioShield Effort for the Production of an rPA Anthrax Vaccine:
ASPR Lacks an Effective Strategy to Minimize Waste in the Strategic
National Stockpile and Plans to Use Expired Anthrax Vaccine:
Conclusions:
Recommendations for Executive Action:
Agency Comments and Our Evaluation:
Appendix I: Time Line of Events in the First rPA Anthrax Vaccine
Development and Procurement Effort:
Appendix II: Comments from the Department of Health and Human Services:
Appendix III: Comments from the Department of Defense:
Abbreviations:
ASPR: Office of the Assistant Secretary for Preparedness and Response:
AVA: Anthrax Vaccine Adsorbed:
AVIP: Anthrax Vaccine Immunization Program:
BARDA: Biomedical Advanced Research and Development Authority:
CBER: Center for Biologics Evaluation and Research:
CBRN: chemical, biological, radiological, or nuclear:
CDC: Centers for Disease Control:
cGMP: current Good Manufacturing Practices:
DHS Department of Homeland Security:
DOD: Department of Defense:
EUA emergency use authorization:
FDA: Food and Drug Administration:
HHS: Department of Health and Human Services:
IND: investigational new drug:
IOM: Institute of Medicine:
NIAID: National Institute of Allergy and Infectious Diseases:
NIH: National Institutes of Health:
PHEMCE: Public Health Emergency Medical Countermeasure Enterprise:
PTA: population threat assessment:
RFI: request for information:
RFP: request for proposal:
rPA: recombinant protective antigen:
TRL: Technology Readiness Level:
United States Government Accountability Office:
Washington, DC 20548:
October 23, 2007:
The Honorable Edward M. Kennedy:
Chairman:
Committee on Health, Education, Labor and Pensions:
United States Senate:
The Honorable Joseph I. Lieberman:
Chairman:
The Honorable Susan M. Collins:
Ranking Member:
Committee on Homeland Security and Governmental Affairs:
United States Senate:
The Honorable Richard Burr:
United States Senate:
The anthrax attacks in September and October 2001 highlighted major
gaps in our civilian preparedness to respond to health emergencies that
threaten national security. These incidents also led the Congress and
the federal government to focus attention on the importance of
developing new drugs, vaccines, and therapeutics to protect U.S.
citizens.
In 2002, in response to the anthrax attacks, the National Institute of
Allergy and Infectious Diseases (NIAID) within the National Institutes
of Health (NIH) launched an effort to rapidly develop a second
generation recombinant protective antigen (rPA) anthrax
vaccine.[Footnote 1] While there is already a licensed anthrax vaccine
(BioThrax), it is given in six doses over 18 months followed by an
annual booster. NIAID wanted to have a vaccine that could be
administered in an immunization series of not more than three
doses.[Footnote 2]
In the late 1980s, Department of Defense (DOD) research identified an
rPA anthrax vaccine, created with a process that (1) is fully defined,
quantified, and controlled in terms of protective antigens; (2) showed
development potential; and (3) required fewer doses. DOD researchers
developed a fully defined manufacturing process to produce highly
purified rPA. The researchers found that they could protect animals
using this rPA with fewer doses than the existing licensed
vaccine.[Footnote 3] In 2002, the Institute of Medicine (IOM) stated
that although AVA--Anthrax Vaccine Adsorbed, now called BioThrax--is
safe and effective for use, "it is far from optimal."[Footnote 4] The
IOM supported the development of a new anthrax vaccine. According to
the Department of Health and Human Services (HHS), when an rPA vaccine
is fully developed, it will address the shortcomings of the AVA vaccine
identified in the IOM report.[Footnote 5]
In 2002 and 2003, NIAID awarded development contracts for rPA vaccines
to two companies--VaxGen and Avecia. VaxGen was a small U.S.
biotechnology company. According to NIAID, one of the objectives was to
demonstrate how manufacturing efforts might be increased to support
creation of a national stockpile of medical countermeasures.
The Project BioShield Act of 2004 formalized this initiative and
authorized the Secretary of HHS, who in turn entrusted the Office of
the Assistant Secretary for Preparedness and Response (ASPR)[Footnote
6] with responsibility for acquiring and ensuring the management of and
accounting for a Strategic National Stockpile of medical
countermeasures.[Footnote 7] It is designed to supplement and resupply
state and local public health agencies in the event of a national
emergency anywhere and anytime within the United States or its
territories. Among other medical countermeasures, this stockpile
contained, as of June 2007, about 10 million doses of BioThrax, the
licensed anthrax vaccine.[Footnote 8] Since doses of BioThrax, like
other vaccines, have an expiration date, these doses will be disposed
of if they are not used before their expiration date.
The only other large user of BioThrax vaccine is DOD, which has
procured its own inventory of the vaccine. DOD has a mandatory Anthrax
Vaccine Immunization Program (AVIP) for military personnel, emergency-
essential DOD civilians, and contractors, based on defined geographic
areas or roles. The policy also allows personnel previously immunized
against anthrax, who are no longer deployed to high-threat areas, to
receive follow-up vaccine doses and booster shots on a voluntary basis.
In November 2004, ASPR awarded VaxGen a procurement contract for $877.5
million for the manufacture and delivery of 75 million doses of its rPA
anthrax vaccine to the Strategic National Stockpile. Two years later,
in December 2006, ASPR terminated VaxGen's contract for failure to meet
a critical contractual milestone. The failure of this procurement
effort raised larger questions regarding the country's ability to
develop a new anthrax vaccine and a robust and sustainable biodefense
medical countermeasure industry by building a partnership between
pharmaceutical and biotechnology firms and the government. The biotech
industry has raised concerns whether the government can clearly define
its requirements for future procurement contracts.
In our May 2006 testimony, we concluded that ASPR's procurement
strategy for rPA anthrax vaccine had been very aggressive. We stated
that "it is important to understand the unique issues at stake in this
early phase of implementation of the biodefense strategy. The rest of
the biotechnology sector will be watching to see whether the industry
and the U.S. government can make this partnership work. Issues with
this contract might have an effect beyond just this individual vaccine
procurement. They could have an impact on how the biotechnology
industry responds to government overtures in the future for the
development and procurement of medical countermeasures for the many
biothreat agents still to be addressed." [Footnote 9]
To assist in ongoing efforts to address these concerns, you asked that
we identify (1) factors that contributed to the failure of ASPR's first
Project BioShield procurement effort with VaxGen for an rPA anthrax
vaccine and (2) issues associated with using the licensed anthrax
vaccine, BioThrax, in the Strategic National Stockpile.
Scope and Methodology:
To determine what factors contributed to the failure of ASPR's
procurement effort with VaxGen, we interviewed officials from HHS's
components--ASPR, NIAID, the Food and Drug Administration (FDA), and
the Centers for Disease Control and Prevention (CDC). In addition, we
reviewed documents these agencies provided. We visited and interviewed
the officials of the two companies--Avecia and VaxGen--that NIAID
contracted with to develop the new rPA anthrax vaccine. We also talked
to officials of several biotech companies that are currently working on
biodefense medical countermeasures. We consulted with a small group of
experts in the manufacturing of biodefense vaccines to ensure that our
assessments were accurate. Finally, we reviewed scientific literature
on vaccine development, manufacturing, and safety and efficacy,
including regulatory requirements for licensing.
To identify issues associated with using the licensed anthrax vaccine
(BioThrax) in the stockpile, we interviewed officials from ASPR, CDC,
and DOD. In addition, we reviewed documents these agencies provided and
analyzed data on stockpile inventory of the licensed anthrax vaccine.
We visited and interviewed officials from Emergent Biosolutions, the
company that manufactures the licensed anthrax vaccine. We also talked
to officials of several biotech companies that are currently working on
biodefense medical countermeasures to obtain their views on ways to
minimize waste in the stockpile. We conducted our review from June 2007
through August 2007 in accordance with generally accepted government
auditing standards.
Results in Brief:
Three major factors contributed to the failure of the first Project
BioShield procurement effort. First, ASPR awarded the first BioShield
procurement contract to VaxGen when its product was at a very early
stage of development and many critical manufacturing issues (such as
stability[Footnote 10] and scale-up production[Footnote 11]) had not
been addressed. ASPR officials told us that they felt a sense of
urgency to demonstrate to the public that a new, improved vaccine was
coming; they also stated that at the time of the award, they were 80
percent to 90 percent confident about VaxGen's chances of success.
These officials based this confidence level on a subjective assessment
and not on objective tools to determine a product's level of maturity.
This award--several years before planned completion of earlier and
uncompleted NIAID development contracts with VaxGen--preempted critical
development work. Similarly, the requirement to deliver 75 million
doses of rPA anthrax vaccine was not based on objective data. This
requirement, according to the industry experts, would have been
unrealistic for even a large pharmaceutical firm, given that the
product was at an early stage of development.
Second, VaxGen took unrealistic risks in accepting the contract terms.
According to VaxGen officials, they understood that their chances of
success were limited. Nonetheless, they accepted the contract terms in
spite of (1) the aggressive delivery time line, (2) their lack of in-
house technical expertise in stability and vaccine formulation--a
condition exacerbated by the attrition of key staff from the company as
the contract progressed--and (3) their limited options for securing
additional funding should the need arise for additional testing
required to meet regulatory requirements.
Third, important FDA requirements regarding the type of data and
testing required for the rPA anthrax vaccine to be eligible for use in
an emergency were not known--to FDA, NIAID, ASPR, and VaxGen--at the
outset of the procurement contract. They were defined later when FDA
introduced new guidance on emergency use authorization (EUA). In
addition, ASPR's anticipated use of the rPA anthrax vaccine was not
articulated to all parties clearly enough and evolved over time.
Finally, according to VaxGen, the purchase of BioThrax for the
stockpile as a stopgap measure raised the requirement for using the
VaxGen rPA vaccine. All of these factors created confusion over the
acceptance criteria for VaxGen's product and significantly diminished
VaxGen's ability to meet contract time lines.
ASPR had announced its intention to issue another request for proposal
for an rPA anthrax vaccine procurement in 2007 but had not done so at
the time of this report.[Footnote 12] Since ASPR and other HHS
components involved have not completed any formal lessons-learned
exercise from the first procurement's failure, they may repeat their
mistakes in the absence of a corrective plan. According to industry
experts, the lack of clear requirements is a cause of concern to
companies asked to partner with the government since they invest
significant resources in trying to meet government needs and now
question whether the government can clearly define its requirements for
future procurement contracts.
We identified two issues related to using the licensed anthrax vaccine,
BioThrax, in the Strategic National Stockpile: First, ASPR lacks an
effective strategy to minimize waste.[Footnote 13] Vaccine valued at
more than $12 million has already expired and is no longer usable.
Without an effective management strategy in the future, over $100
million per year could be lost for the life of the licensed anthrax
vaccine currently in the stockpile. ASPR could minimize such potential
waste by developing a single inventory system for BioThrax with DOD,
with rotation based on a first-in, first-out principle. DOD and ASPR
officials told us that they discussed the rotation option in 2004 but
identified several obstacles. Specifically, since the funding to
purchase BioThrax comes from DOD and HHS appropriations, respectively,
ASPR officials believe funding transfer may be a problem. However, DOD
officials told us that funding is not an issue. DOD and ASPR officials
told us that they have used different authorities to indemnify the
manufacturer against any losses or problems that may arise from use of
the vaccine.[Footnote 14] Finally, since DOD vaccinates its troops at
various locations around the world, there may be logistical
distribution issues. DOD officials acknowledged that these issues could
be resolved.
The second issue related to use of the BioThrax in the Strategic
National Stockpile is ASPR's planned use of expired vaccine in
violation of FDA's current rules. According to CDC, ASPR told CDC not
to dispose of three lots of BioThrax vaccine that expired in 2006 and
2007. ASPR officials told us that the agency's decision was based on
the possible need to use these lots of vaccines in an emergency.
However, FDA rules prohibit the use of expired vaccine.[Footnote 15]
Thus, ASPR's planned use of expired vaccine would violate FDA's current
rules and could undermine public confidence because ASPR would be
unable to guarantee the potency of the vaccine.
To help ensure the success of future medical countermeasures
procurement, we recommend that the Secretary of HHS direct ASPR, NIAID,
FDA, and CDC to ensure that the concept of use and all critical
requirements for such procurements are clearly articulated at the
outset.
To ensure public confidence and comply with FDA's current rules, we
recommend that the Secretary of HHS direct ASPR to destroy the expired
BioThrax vaccine in the stockpile.
To minimize waste of the BioThrax anthrax vaccine in the stockpile, we
recommend that the Secretaries of HHS and DOD develop a single
integrated inventory system for the licensed anthrax vaccine, with
rotation based on a first-in, first-out principle.
HHS and DOD provided written comments on a draft of this report and
generally concurred with our recommendations. In addition, with regard
to our recommendation on integrated stockpile, they identified funding
and legal challenges to developing an integrated inventory system for
BioThrax in the stockpile, which may require legislative action.
Although HHS and DOD use different authorities to address BioThrax
liability and funding issues, both authorities could apply to either
DOD or HHS; consequently, indemnity does not appear to be an
insurmountable obstacle for future procurements.
Background:
Following the anthrax attacks of 2001, the federal government
determined that it would need additional medical countermeasures (for
example, pharmaceuticals, vaccines, diagnostics, and other treatments)
to respond to an attack involving chemical, biological, radiological,
or nuclear (CBRN) agents.
Project BioShield:
The Project BioShield Act of 2004 (Public Law 108-276) was designed to
encourage private companies to develop civilian medical countermeasures
by guaranteeing a market for successfully developed countermeasures.
The Project BioShield Act (1) relaxes some procedures for bioterrorism-
related procurement, hiring, and research grant awarding; (2) allows
for the emergency use of countermeasures not approved by FDA; and (3)
authorizes 10-year funding (available through fiscal year 2013) to
encourage the development and production of new countermeasures for
CBRN agents. The act also authorizes HHS to procure these
countermeasures for the Strategic National Stockpile.
Project BioShield is a procurement program that allows the government
to enter into contracts to procure countermeasures while they still are
in development, up to 8 years before product licensure is expected.
Under this program, the government agrees to buy a certain quantity of
successfully developed countermeasures for the Strategic National
Stockpile at a specified price once the countermeasure meets specific
requirements. The government pays the agreed-upon amount only after
these requirements are met and the product is delivered to the
Strategic National Stockpile. If the product does not meet the
requirements within the specified time frame, the contract can be
terminated without any payment to the contractor. Thus, while Project
BioShield reduces the producer's market risk--that is, the possibility
that no customer will buy the successfully developed product--it does
not reduce the development risk to the producer--that is, the
possibility that the countermeasure will fail during development.
In December 2006, the Pandemic and All-Hazards Preparedness Act (Public
Law 109-417) modified the Project BioShield Act to allow for milestone-
based payments before countermeasure delivery for up to half of the
total award. Within HHS, the Biomedical Advanced Research and
Development Authority (BARDA) has the authority to directly fund the
advanced development of countermeasures that are not eligible for
Project BioShield contracts.
Agency Roles in Developing, Procuring, and Stockpiling Medical
Countermeasures:
Project BioShield procurement involves actions by the Department of
Homeland Security (DHS), HHS (including ASPR, NIAID, FDA, and CDC), and
an interagency working group.
DHS's Role:
The first step in the Project BioShield acquisition process is to
determine whether a particular CBRN agent poses a material threat to
national security. DHS performs this analysis, which is generally
referred to as a population threat assessment (PTA). On the basis of
this assessment, the DHS Secretary determines whether that agent poses
a material threat to national security. The Project BioShield Act of
2004 requires such a written PTA for procurements using BioShield funds
and authorities. This declaration neither addresses the relative risk
posed by an agent nor determines the priority for acquisition, which is
solely determined by ASPR. Furthermore, the issuance of a PTA does not
guarantee that the government will pursue countermeasures against that
agent. DHS has issued PTAs for 13 agents, including the biological
agents that cause anthrax; multi-drug-resistant anthrax; botulism;
glanders; meliodosis; tularemia; typhus; smallpox; plague; and the
hemorrhagic fevers Ebola, Marburg, and Junin.
HHS's Role:
Various offices within HHS (ASPR, NIAID, FDA, and CDC) fund the
development research, procurement, and storage of medical
countermeasures, including vaccines, for the Strategic National
Stockpile.
ASPR's role: ASPR is responsible for the entire Project BioShield
contracting process, including issuing requests for information and
requests for proposals, awarding contracts, managing awarded contracts,
and determining whether contractors have met the minimum requirements
for payment. ASPR maintains a Web site detailing all Project BioShield
solicitations and awards.
ASPR has the primary responsibility for engaging with the industry and
awarding contracts for large-scale manufacturing of licensable
products, including vaccines, for delivery into the Strategic National
Stockpile. With authorities recently granted, BARDA will be able to use
a variety of funding mechanisms to support the advanced development of
medical countermeasures and to award up to 50 percent of the contract
as milestone payments before purchased products are delivered.
NIAID's role: NIAID is the lead agency in NIH for early candidate
research and development of medical countermeasures for biodefense.
NIAID issues grants and awards contracts for research on medical
countermeasures exploration and early development, but it has no
responsibility for taking research forward into marketable products.
FDA's role: Through its Center for Biologics Evaluation and Research
(CBER), FDA licenses many biological products, including vaccines, and
the facilities that produce them. Manufacturers are required to comply
with current Good Manufacturing Practices regulations, which regulate
personnel, buildings, equipment, production controls, records, and
other aspects of the vaccine manufacturing process. FDA has also
established the Office of Counterterrorism Policy and Planning in the
Office of the Commissioner, which issued the draft Guidance on the
Emergency Use Authorization of Medical Products in June 2005. This EUA
guidance describes in general terms the data that should be submitted
to FDA, when available, for unapproved products or unapproved uses of
approved products that HHS or another entity wishes FDA to consider for
use in the event of a declared emergency. The final EUA guidance was
issued in July 2007.
CDC's role: Since 1999, CDC has had the major responsibility for
managing and deploying the medical countermeasures stored in the
Strategic National Stockpile. The Omnibus Consolidated and Emergency
Supplemental Appropriations Act (Public Law 105-277) first provided the
stockpile with a fund specially appropriated for purchases. Since then,
CDC has maintained this civilian repository of medical countermeasures,
such as antibiotics and vaccines.
DOD's Role:
DOD is not currently a part of Project BioShield. Beginning in 1998,
DOD had a program to vaccinate all military service members with
BioThrax. DOD's program prevaccinates personnel for deployment to Iraq,
Afghanistan, and the Korean peninsula with BioThrax. For other
deployments, this vaccination is voluntary. DOD also has a program to
order, stockpile, and use the licensed anthrax vaccine. DOD estimates
its needs for BioThrax doses and bases its purchases on that estimate.
Interagency Working Group:
Multiple agencies, including HHS and DHS, provide input on priority-
setting and requirements activities. For BioShield purchases, the
Secretaries of HHS and DHS prepare a joint recommendation, which
requires presidential approval before HHS enters into a procurement
contract. The Secretary of HHS currently coordinates the interagency
process; the National Science and Technology Council previously handled
the coordination.
The Nature of Anthrax and the Anthrax Vaccine:
The Nature of Anthrax:
Anthrax is a rare but serious acute infectious disease that must be
treated quickly with antibiotics. Anthrax is caused by the spore-
forming bacterium Bacillus anthracis. It occurs most commonly in
herbivores in agricultural regions that have less effective veterinary
and public health programs. Anthrax can infect humans who have been
exposed to infected animals or products from infected animals such as
hide, hair, or meat. Human anthrax occurs rarely in the United States
from these natural causes. However, the anthrax exposures in September
and October 2001 through mail intentionally contaminated with anthrax
spores resulted in illness in 22 persons and the death of 5.
The Licensed Vaccine for Anthrax:
An FDA-licensed anthrax vaccine, BioThrax, has been available since
1970. The vaccine has been recommended for laboratory workers who are
involved in the production of cultures of anthrax or who risk repeated
exposure to anthrax by, for example, conducting confirmatory or
environmental testing for anthrax in the U.S. Laboratory Response
Network for Bioterrorism laboratories; persons who may be required to
make repeated entries into known Bacillus anthracis contaminated areas
after a terrorist attack, such as remediation workers; and persons who
work with imported animal hides, furs, or similar materials, if the
industry standards and restrictions that help to control the disease
are insufficient to prevent exposure to anthrax spores.
Preventive anthrax vaccine is not recommended for civilians who do not
have an occupational risk. However, in 1998, DOD began a mandatory
program to administer the vaccine to all military personnel for
protection against possible exposure to anthrax-based biological
weapons. By late 2001, roughly 2 million doses of the vaccine had been
administered, most of them to U.S. military personnel. As the
vaccination program proceeded, some military personnel raised concerns
about the safety and efficacy of the vaccine.[Footnote 16]
The BioShield program stockpiled BioThrax for the Strategic National
Stockpile for postexposure use in the event of a large number of U.S.
civilians being exposed to anthrax. ASPR officials characterized the
acquisition of the licensed vaccine as a "stopgap" measure as they also
have been engaged in the development and purchase of a new rPA anthrax
vaccine. ASPR had already acquired 10 million doses of BioThrax from
Emergent BioSolutions by 2006 and recently purchased an additional 10
million doses.
The Vaccine Development Process:
Vaccine research and development leading to FDA approval for use is a
long and complex process. It may take 15 years and, according to FDA,
cost from $500 million to $1.2 billion and require specialized
expertise.
Vaccines are complex biological products given to a person or animal to
stimulate an immune reaction the body can "remember" if it is exposed
to the same pathogen later.[Footnote 17] In contrast to most drugs,
they have no simple chemical characterization. As a result, evaluating
them involves measuring their effects on living organisms, and their
quality can be guaranteed only through a combination of in-process
tests, end-product tests, and strict controls of the entire
manufacturing process.
Vaccines are highly perishable and typically require cold storage to
retain potency. Even if they are stored at the recommended temperature,
most vaccines have expiration dates beyond which they are considered
outdated and should not be used. A great deal of attention is directed
to using the vaccine before its expiration date. For example, a recent
CDC manual advises users: "Check expiration date on container" and
"rotate stock so that the earliest dated material is used first." After
the storage vial has been opened, the vaccine begins to deteriorate
quickly in many cases, often necessitating the opened or reconstituted
vaccine to be used within minutes to hours or discarded."[Footnote 18]
Since human challenge studies cannot be conducted for CBRN medical
countermeasures, FDA requires animal efficacy data instead.
The FDA process for approving a biologic for use in the United States
begins with an investigational new drug (IND) application.[Footnote 19]
A sponsor that has developed a candidate vaccine applies to start the
FDA oversight process of formal studies, regulated by CBER within FDA.
Phase 1 trials involve safety and immunogenicity studies in a small
number of healthy volunteer subjects.[Footnote 20] phase 2 and phase 3
trials gather evidence of the vaccine's effectiveness in ever larger
groups of subjects, providing the documentation of effectiveness and
important additional safety data required for licensing. If the data
raise safety or effectiveness concerns at any stage of clinical or
animal studies, FDA may request additional information or halt ongoing
clinical studies.[Footnote 21]
In vaccine development, clinical trials typically last up to 6 years.
After they have been successfully completed, the sponsor applies for
FDA's approval to market the product. FDA's review of the license
application includes review of the manufacturing facility and process.
According to FDA, this process is typically completed within 10 months
for a standard review and 6 months for a priority review. According to
industry sources, the challenge in scaling up vaccine production from a
research laboratory to a large manufacturing environment while still
maintaining quality requires much skill, sophisticated facilities, and
a great deal of experience.
Several Factors Contributed to the Failure of ASPR's First Project
BioShield Effort for the Production of an rPA Anthrax Vaccine:
Three major factors contributed to the failure of the first Project
BioShield procurement effort. First, ASPR awarded the first BioShield
procurement contract to VaxGen when its product was at a very early
stage of development and many critical manufacturing issues had not
been addressed. Second, VaxGen took unrealistic risks in accepting the
contract terms. Third, key parties did not clearly articulate and
understand critical requirements at the outset.
HHS Awarded the Procurement Contract Before Development Had Reached an
Appropriate Level of Maturity:
ASPR's decision to launch the VaxGen procurement contract for the rPA
anthrax vaccine at an early stage of development, combined with the
delivery requirement for 25 million doses within 2 years,[Footnote 22]
did not take the complexity of vaccine development into consideration
and was overly aggressive. Citing the urgency involved, ASPR awarded
the procurement contract to VaxGen several years before the planned
completion of earlier and uncompleted NIAID development contracts with
VaxGen and thus preempted critical development work. (For a time line
of events for the first rPA anthrax vaccine development and procurement
effort, see appendix I).
In response to the anthrax attacks of 2001, NIAID was assigned
responsibility for developing candidate vaccines leading up to
licensure, purchase, and storage in the stockpile. NIAID envisioned a
strategy of minimizing risk by awarding contracts to multiple companies
to help ensure that at least one development effort would be
successful. NIAID's strategy was appropriate since failure is not
uncommon in vaccine development. Toward this end, NIAID designed a
sequence of two contracts--one to follow the other--to advance pilot
lots of rPA anthrax vaccine through early characterization work, phase
1 and phase 2 clinical trials, accelerated and real-time (long-term)
stability testing, and tasks to evaluate the contractor's ability to
manufacture the vaccine in large quantities according to current Good
Manufacturing Practices (cGMP).[Footnote 23] Additionally, these
contracts were cost reimbursable, an appropriate contracting mechanism
when uncertainties involved in contract performance do not permit cost
to be estimated with sufficient accuracy to use a fixed-price contract.
VaxGen was one of the awardees. The other awardee was Avecia, Ltd., of
Manchester, United Kingdom. NIAID's development effort with Avecia to
prepare a candidate rPA anthrax vaccine for potential purchase for the
stockpile is ongoing.
VaxGen's first development contract, awarded in September 2002, had
three major requirements: characterize the chemical composition of the
pilot lot; conduct phase 1 clinical trials to determine the basic
safety profile of the vaccine; and produce a feasibility plan to
manufacture, formulate, fill and finish, test, and deliver up to 25
million doses of cGMP vaccine. The initial period of performance for
this first contract was 15 months, to be completed in September 2003.
However, NIAID twice extended the period of performance to accommodate
problems, including stability testing. The final completion date of the
contract was December 2006.
The second development contract was awarded to VaxGen in September 2003
to continue development of its vaccine. This contract covered 36 months
and was scheduled to end in October 2006. Three of the major
requirements were to (1) manufacture, formulate, fill, finish, release,
and deliver 3 million to 5 million doses of vaccine from at least three
different lots that met cGMP requirements; (2) develop, implement, and
execute accelerated and real-time stability testing programs to ensure
the safety, sterility, potency, and integrity of the vaccine; and (3)
conduct phase 2 clinical trials.
This second development contract covered especially critical steps in
the development cycle. For example, only during the phase 2 trials is
the vaccine given to a large enough number of human subjects to further
project its safety. Under the contract, phase 2 clinical trials, which
were to determine the optimum dose and dosing regimen, were expected to
take 2 years to complete.[Footnote 24] This second contract also
covered accelerated and real-time stability testing programs to ensure
the safety, sterility, potency, and integrity of the vaccine. Vaccines,
especially those intended to be stockpiled, need to exhibit the
necessary stability to ensure they will remain safe and potent for the
required storage period.
In early 2004, VaxGen's product entered particularly critical stages of
development and scale-up production. According to industry officials we
talked to, the challenge in scaling up vaccine production from a
research pilot lot to a large manufacturing environment while still
maintaining quality is not trivial. It requires a great deal of skill,
sophisticated facilities, and experience. The officials also stated
that work on the vaccine at this point would have been expected to take
multiple years to complete, during which time the contractor would work
back and forth with FDA in evaluating, testing, and then reworking both
its product and manufacturing capability against criteria for eventual
licensure.
However, on November 4, 2004, a little more than a year after NIAID
awarded VaxGen its second development contract, ASPR awarded the
procurement contract to VaxGen for 75 million doses of its rPA anthrax
vaccine. At that time, VaxGen was still at least a year away from
completing the Phase 2 clinical trials under the second NIAID
development contract. Moreover, VaxGen was still finishing up work on
the original stability testing required under the first development
contract.
ASPR officials at the time of the award had no objective criteria, such
as Technology Readiness Levels (TRL), to assess product
maturity.[Footnote 25] They were, however, optimistic the procurement
contract would be successful. One official described its chances of
success at 80 percent to 90 percent. However, a key official at VaxGen
told us at the same time that VaxGen estimated the chances of success
at 10 percent to 15 percent. ASPR now estimates that prior to award,
the rPA vaccine was at a TRL rating of 8. According to industry
experts, a candidate vaccine product at such a level is generally
expected to be 5-8 years away from completion and to have only a 30
percent chance of development into a successful vaccine.[Footnote 26]
When we asked ASPR officials why they awarded the procurement contract
when they did, they pointed to a sense of urgency at that time and the
difficulties in deciding when to launch procurement contracts. However,
November 2004 was 3 years after the anthrax attacks in 2001, and while
the sense of urgency was still important, it could have been tempered
with realistic expectations. According to industry experts, preempting
the development contract 2 years before completing work--almost half
its scheduled milestones--was questionable, especially for vaccine
development work, which is known to be susceptible to technical issues
even in late stages of development. NIAID officials also told us that,
in their opinions, it was too early for a BioShield purchase. At a
minimum, the time extensions for NIAID's first development contract
with VaxGen to accommodate stability testing should have indicated to
ASPR that development on its candidate vaccine was far from complete.
After ASPR awarded VaxGen the procurement contract, NIAID canceled
several milestones under its development contract with VaxGen to free
up funds for earlier milestones that VaxGen was having trouble meeting.
However, this undermined VaxGen's ability to refine product development
up to the level needed to ensure delivery within the 2-year time frame
required under the procurement contract.
VaxGen Took an Unrealistic Risk in Accepting the Procurement Contract,
Knowing Its Own Technical and Financial Limitations:
VaxGen officials told us that they understood their chances for success
were limited and that the contract terms posed significant risks. These
risks arose from aggressive time lines, VaxGen's limitations with
regard to in-house technical expertise in stability and vaccine
formulation--a condition exacerbated by the attrition of key staff from
the company as the contract progressed--and its limited options for
securing additional funding should the need arise.
Industry experts told us that a 2-year time line to deliver 75 million
filled and finished doses of a vaccine from a starting point just after
phase 1 trials is a near-impossible task for any company. VaxGen
officials told us that at the time of the procurement award they knew
the probability of success was very low, but they were counting on
ASPR's willingness to be flexible with the contract time line and work
with them to achieve success. In fact, in May 2006, ASPR did extend the
contract deadlines to initiate delivery to the stockpile an additional
2 years. However, on November 3, 2006, FDA imposed a clinical hold on
VaxGen's forthcoming phase 2 trial after determining that data
submitted by VaxGen were insufficient to ensure that the product would
be stable enough to resume clinical testing.[Footnote 27] By that time,
ASPR had lost faith in VaxGen's technical ability to solve its
stability problems in any reasonable time frame. When VaxGen failed to
meet a critical performance milestone of initiating the next clinical
trial, ASPR terminated the contract.
According to VaxGen's officials, throughout the two development
contracts and the Project BioShield procurement contract, VaxGen's
staff peaked at only 120, and the company was consistently unable to
marshal sufficient technical expertise. While it is not known how a
larger pharmaceutical company might have fared under similar time
constraints, we believe more established pharmaceutical companies have
staff and resources better able to handle the inevitable problems that
arise in vaccine development and licensure efforts. For example,
according to industry experts, a large firm might be able to leverage
an entire internal department to reformulate a vaccine or pursue
solutions to a stability issue, while a smaller biotechnology company
like VaxGen would likely be unable to use more than a few full-time
scientists. In such situations, the smaller company might have to
contract out for the necessary support, provided it can be found within
a suitable time frame.
External expertise that might have helped VaxGen better understand its
stability issue was never applied. At one point during the development
contracts, NIAID--realizing VaxGen had a stability problem with its
product--convened a panel of technical experts in Washington, D.C.
NIAID officials told us that at the time of the panel meeting, they
offered to fund technical experts to work with the company, but VaxGen
opted not to accept the offer. Conversely, VaxGen officials reported to
us that at the time NIAID convened the panel of experts, NIAID declined
to fund the work recommended by the expert panel.
The lack of available technical expertise was exacerbated when key
staff at the company began leaving. A senior VaxGen official described
the attrition problem as "massive." Of special significance, VaxGen's
Senior Vice President for Research and Development and Chief Scientific
Officer left during critical phase 2 trials. An official at VaxGen
described this person's role as key in both development of the assays
and reformulation of the vaccine.[Footnote 28]
Finally, VaxGen accepted the procurement contract terms even though the
financial constraints imposed by the BioShield Act limited its options
for securing any additional funding needed. In accordance with this
act, payment was conditional on delivery of a product to the stockpile,
and little provision could be made, contractually, to support any
unanticipated or additional development needed--for example, to work
through issues of stability or reformulation.[Footnote 29] Both
problems are frequently encountered throughout the developmental life
of a vaccine. This meant that the contractor would pay for any
development work needed on the vaccine. VaxGen, as a small
biotechnology company, had limited internal financial resources and was
dependent on being able to attract investor capital for any major
influx of funds.
In such a firm, fixed-price contractual arrangement, the contractor
assumes most of the risk because the price is not subject to any
adjustment based on the contractor's cost experience. Thus, even if the
contractor costs go up, the delivery price does not. We believe these
contracts are appropriate in situations where there are no performance
uncertainties or the uncertainties can be identified and reasonable
estimates of their cost impact can be made, but this was not the
situation in the VaxGen procurement contract. VaxGen had to be willing
to accept the firm, fixed-price contract and assume the risks involved.
VaxGen did so even though it understood that development on its rPA
vaccine was far from complete when the procurement contract was awarded
and that the contract posed significant inherent risks.
Key Parties Did Not Clearly Articulate and Understand Critical
Requirements:
Important requirements regarding the data and testing required for the
rPA anthrax vaccine to be eligible for use in an emergency were not
known at the outset of the procurement contract. They were defined in
2005 when FDA introduced new general guidance on EUA. In addition,
ASPR's anticipated use of the rPA anthrax vaccine was not articulated
to all parties clearly enough and evolved over time. Finally, purchase
of BioThrax raised the requirement for use of the VaxGen rPA vaccine.
All of these factors created confusion over the acceptance criteria for
VaxGen's product and significantly diminished VaxGen's ability to meet
contract time lines.
Guidance on Emergency Use Authorization Appeared:
Midcontract and Created Confusion:
Criteria for product acceptance need to be clearly articulated and
understood by all parties before committing to a major procurement.
Terms of art that leave critical requirements unclear are problematic
in contract language. After VaxGen received its procurement contract,
draft guidance was issued that addressed the eventual use of any
unlicensed product in the stockpile. This created confusion over the
criteria against which VaxGen's product would be evaluated, strained
relations between the company and the government, and caused a
considerable amount of turmoil within the company as it scrambled for
additional resources to cover unplanned testing.
In June 2005, FDA issued draft EUA guidance, which described for the
first time the general criteria that FDA would use to determine the
suitability of a product for use in an emergency.[Footnote 30] This was
7 months after the award of the procurement contract to VaxGen and 14
months after the due date for bids on that contract.
Since the request for proposal for the procurement contract was issued
and the award itself was made before the EUA guidance was issued,
neither could take the EUA requirements into consideration. The
procurement contract wording stated that in an emergency, the rPA
anthrax vaccine was to be "administered under a 'Contingency Use'
Investigational New Drug (IND) protocol" and that vaccine acceptance
into the stockpile is dependent on the accumulation and submission of
the appropriate data to support the "use of the product (under IND) in
a postexposure situation." FDA officials told us they do not use the
phrase "contingency use" under IND protocols.
When we asked ASPR officials about the requirements for use defined in
the contract, they said that the contract specifications were
consistent with the statute and the needs of the stockpile. They said
their contract used "a term of art" for BioShield products. That is,
the contractor had to deliver a "usable product" under FDA guidelines.
The product could be delivered to the stockpile only if sufficient data
were available to support emergency use. ASPR officials told us that
FDA would define "sufficient data" and the testing hurdles a product
needed to overcome to be considered a "usable product."
While VaxGen and FDA had monthly communication, according to FDA, data
requirements for emergency use were not discussed until December 2005,
when VaxGen asked FDA what data would be needed for emergency use. In
January 2006, FDA informed VaxGen, under its recently issued draft EUA
guidance, of the data FDA would require from VaxGen for its product to
be eligible for consideration for use in an emergency. The draft
guidance described in general FDA's current thinking concerning what
FDA considered sufficient data and the testing needed for a product to
be considered for authorization in certain emergencies.
Because the EUA guidance is intended to create a more feasible protocol
for using an unapproved product in a mass emergency than the term
"contingency use under an IND protocol" that ASPR used in the
procurement contract, it may require more stringent data for safety and
efficacy. Under an IND protocol, written, informed consent must be
received before administering the vaccine to any person, and reporting
requirements identical to those in a human clinical trial are
required.[Footnote 31] The EUA guidance--as directed by the BioShield
law--eased both informed consent and reporting requirements. This makes
sense in terms of the logistics of administering vaccine to millions of
people in the large-scale, postexposure scenarios envisioned. Because
EUA guidance defines a less stringent requirement for the government to
use the product, it correspondingly may require more testing and
clinical trial work than was anticipated under contingency use.
Several of the agencies and companies involved in BioShield-related
work have told us the EUA guidance appears to require a product to be
further along the development path to licensure than the previous
contingency use protocols would indicate. VaxGen officials told us that
if the draft EUA guidance was the measure of success, then VaxGen
estimated significant additional resources would be needed to complete
testing to accommodate the expectations under this new guidance. NIAID
told us that the EUA guidance described a product considerably further
along the path to licensure (85 percent to 90 percent) than it had
assumed for a Project BioShield medical countermeasure (30 percent)
when it initially awarded the development contracts.
The Concept of Use for the rPA Vaccine Was Not Clearly Articulated to
All Parties:
FDA considers a vaccine's concept of use important information to gauge
the data and testing needed to ensure the product's safety and
efficacy. Under the EUA statute, FDA must determine on the basis of the
specific facts presented whether it is necessary and appropriate to
authorize use of a specific product in an emergency. According to FDA,
data and testing requirements to support a product's use in an
emergency context may vary depending on many factors, including the
number of people to whom the product is expected to be administered.
The current use of an unlicensed product involves the assessment of
potential risks and benefits from use of an unapproved drug in a very
small number of people who are in a potentially life-threatening
situation. In such situations, because of the very significant
potential for benefit, safety and efficacy data needed to make the risk
benefit assessment might be lower than in an emergency situation where
an unlicensed vaccine might be offered to millions of healthy people.
This distinction is critical for any manufacturer of a product intended
for use in such scenarios--it defines the level of data and testing
required. Product development plans and schedules rest on these
requirements.
In late 2005, as VaxGen was preparing for the second phase 2 trial and
well into its period of performance under the procurement contract, its
officials participated in meetings, primarily with FDA but also with
ASPR and NIAID representatives, to receive FDA comments on its product
development plans and responses to specific requests for regulatory
advice. VaxGen needed to have a clear understanding of FDA's data and
testing requirements for the rPA vaccine for the upcoming phase 2 trial
to be able to plan for and implement the necessary clinical and
nonclinical work to generate that data. Without it, VaxGen did not have
adequate means to determine how far along it was toward meeting FDA's
requirements.
However, in these meetings, it became clear that FDA and the other
parties had different expectations for the next phase 2 trial. FDA
officials concluded from the discussion that VaxGen, ASPR, and CDC
anticipated the next phase 2 trial to produce meaningful safety and
efficacy data to support use of the vaccine in a contingency protocol
under IND. However, FDA officials stated that this was a new idea to
the agency.[Footnote 32] From FDA's perspective, the purpose of phase 2
trials was to place the product and sponsor (VaxGen) in the best
position possible to design and conduct a pivotal phase 3 trial in
support of licensure.[Footnote 33] The lack of a definition of concept
of use caused FDA to delay replying to VaxGen until it could confer
with ASPR and CDC to clarify this issue. Thus, we conclude that neither
VaxGen nor FDA understood the rPA anthrax vaccine concept of use until
this meeting.
Purchase of BioThrax for the Stockpile Raised Requirements for Use of
rPA Vaccine:
The introduction of BioThrax into the stockpile undermined the
criticality of getting an rPA vaccine into the stockpile and, at least
in VaxGen's opinion, forced FDA to hold it to a higher standard that
the company had neither the plans nor the resources to achieve. ASPR
purchased 10 million doses of BioThrax in 2005 and 2006 as a stopgap
measure for post-exposure situations. After discussions between VaxGen
and FDA, VaxGen concluded that this raised the bar for its rPA vaccine.
Although BioThrax is currently licensed for use in pre-exposure, and
not postexposure, scenarios, the draft EUA guidance states that FDA
will evaluate each EUA candidate's safety and efficacy profile. The EUA
guidance states that FDA will "authorize" an unapproved or unlicensed
product--such as the rPA anthrax vaccine candidate--only if "there is
no adequate, approved and available alternative." [Footnote
34]According to the minutes of the meeting between FDA and VaxGen, in
January 2006, FDA reported that the unlicensed rPA anthrax vaccine
would be used in an emergency after the stockpiled BioThrax, that is,
"when all of the currently licensed [BioThrax] had been deployed." This
diminished the likelihood of a scenario where the rPA vaccine might be
expected to be used out of the stockpile.
ASPR Lacks an Effective Strategy to Minimize Waste in the Strategic
National Stockpile and Plans to Use Expired Anthrax Vaccine:
We identified two issues related to using the BioThrax in the Strategic
National Stockpile. First, ASPR lacks an effective strategy to minimize
waste. As a consequence, based on current inventory, over $100 million
is likely to be wasted annually, beginning in 2008. Three lots of
BioThrax vaccine in the stockpile have already expired,[Footnote 35]
resulting in losses of over $12 million. According to the data provided
by CDC, 28 lots of BioThrax vaccine will expire in calendar year 2008.
ASPR paid approximately $123 million for these lots. For calendar year
2009, 25 additional lots--valued at about $106 million--will reach
their expiration dates. ASPR could minimize the potential waste of
these lots by developing a single inventory system with DOD--which uses
large quantities of the BioThrax vaccine--with rotation based on a
first-in, first-out principle.[Footnote 36]
Because DOD is a high-volume user of the BioThrax vaccine, ASPR could
arrange for DOD to draw vaccine from lots long before their expiration
dates. These lots could then be replenished with fresh vaccine from the
manufacturer. DOD, ASPR, industry experts, and Emergent BioSolutions
(the manufacturer of BioThrax) agree that rotation on a first-in, first-
out basis would minimize waste.
DOD and ASPR officials told us that they discussed a rotation option in
2004 but identified several obstacles. In July 2007, DOD officials
believed they might not be able to transfer funds to ASPR if DOD
purchases BioThrax from ASPR. However, in response to our draft report,
DOD informed us that funding is not an issue. However, ASPR continues
to believe that transfer of funds would be a problem. DOD stated
smallpox vaccine (Dryvax) procurement from HHS is executed under such
an arrangement. Further, DOD and ASPR officials told us that they use
different authorities to indemnify the manufacturer against any losses
or problems that may arise from use of the vaccine. According to DOD,
this area may require legislative action to ensure that vaccine
purchased by ASPR can be used in the DOD immunization program. Finally,
since DOD vaccinates its troops at various locations around the world,
there may be logistical distribution issues. A DOD official
acknowledged that these issues could be resolved.
Second, ASPR plans to use expired vaccine from the stockpile, which
violates FDA's current rules.[Footnote 37] Data provided by CDC
indicated that two lots of BioThrax vaccine expired in December 2006
and one in January 2007. CDC officials stated that their policy is to
dispose of expired lots since they cannot be used and continuing
storage results in administrative costs. FDA rules prohibit the use of
expired vaccine.
Nevertheless, according to CDC officials, ASPR told CDC not to dispose
of the three lots of expired BioThrax vaccine. ASPR officials told us
that ASPR's decision was based on the possible need to use these lots
in an emergency. ASPR's planned use of expired vaccine would violate
FDA's current rules and could undermine public confidence because ASPR
would be unable to guarantee the potency of the vaccine.
Conclusions:
The termination of the first major procurement contract for rPA anthrax
vaccine raised important questions regarding the approach taken to
develop a new anthrax vaccine and a robust and sustainable biodefense
medical countermeasure industry by bringing pharmaceutical and
biotechnology firms to form a partnership with the government. With the
termination of the contract, the government does not have a new,
improved anthrax vaccine for the public, and the rest of the biotech
industry is now questioning whether the government can clearly define
its requirements for future procurement contracts.
Since HHS components have not completed a formal lessons-learned
exercise after terminating VaxGen's development and procurement
contracts, these components may repeat the same mistakes in the future
in the absence of a corrective plan. Articulating concepts of use and
all critical requirements clearly at the outset for all future medical
countermeasures would help the HHS components involved in the anthrax
procurement process to avoid past mistakes. If this is not done, the
government risks the future interest and participation of the
biotechnology industry.
Given that the amount of money appropriated to procure medical
countermeasures for the stockpile is limited, it is imperative that
ASPR develop effective strategies to minimize waste. Since vaccines are
perishable commodities that should not be used after their expiration
dates, finding other users for the stockpile products before they
expire would minimize waste. Because DOD requires a large amount of the
BioThrax vaccine on an annual basis, it could use a significant portion
of BioThrax in the stockpile before it expires.
Recommendations for Executive Action:
To avoid repeating the mistakes that led to the failure of the first
rPA procurement effort, we recommend that the Secretary of HHS direct
ASPR, NIAID, FDA, and CDC to ensure that the concept of use and all
critical requirements are clearly articulated at the outset for any
future medical countermeasure procurement.
To ensure public confidence and comply with FDA's current rules, we
recommend that the Secretary of HHS direct ASPR to destroy the expired
BioThrax vaccine in the stockpile.
To minimize waste of the BioThrax vaccine in the stockpile, we
recommend that the Secretaries of HHS and DOD develop a single
integrated inventory system for the licensed anthrax vaccine, with
rotation based on a first-in, first-out principle.
Agency Comments and Our Evaluation:
We provided a draft of this report to the Department of Health and
Human Services and the Department of Defense for review and comment.
HHS and DOD provided written comments on our draft, which are reprinted
in appendixes II and III, respectively. Both agencies also provided
technical comments, which we have addressed in the report text as
appropriate.
HHS and DOD generally concurred with our recommendations. However, with
regard to our recommendation on an integrated stockpile, they
identified funding and legal challenges to developing an integrated
inventory system for BioThrax in the stockpile, which may require
legislative action. Although HHS and DOD use different authorities to
address BioThrax liability and funding issues, both authorities could
apply to either DOD or HHS; consequently, indemnity does not appear to
be an insurmountable obstacle for future procurements.
HHS also disagreed with a number of our specific findings. We have
addressed these areas of disagreement in detailed comments in appendix
II.
We are sending copies of this report the Secretary of the Department of
Defense and the Secretary of the Department of Health and Human
Services. We are also sending a copy of this report to other interested
congressional members and committees. In addition, the report will be
available at no charge on GAO's Web site at [hyperlink,
http://www.gao.gov].
If you or your staffs have any questions about this report or would
like additional information, please contact me at (202) 512-6412 or
rhodesk@gao.gov, or Sushil K. Sharma, Ph.D., Dr.PH, at (202) 512-3460
or sharmas@gao.gov. Contact points for our Offices of Congressional
Relations and Public Affairs may be found on the last page of this
report.
GAO staff who made major contributions to this report included Noah
Bleicher, William Carrigg, Barbara Chapman, Crystal Jones, Jeff
McDermott, and Linda Sellevaag.
Signed by:
Keith Rhodes, Chief Technologist:
Center for Technology and Engineering Applied Research and Methods:
[End of section]
Appendix I: Time Line of Events in the First rPA Anthrax Vaccine
Development and Procurement Effort:
Table 1:
Year: 2001;
Month: Oct.-Nov;
Event: Letters contaminated with anthrax spores sent through U.S.
Postal Service, resulting in death of five persons.
Year: 2002;
Month: April;
Event: National Institute of Allergy and Infectious Diseases (NIAID)
issues first rPA anthrax vaccine request for proposal (RFP).
Year: 2002;
Month: Sept;
Event: NIAID awards rPA contracts to Avecia and VaxGen for first RFP.
Year: 2003;
Month: May;
Event: NIAID issues second rPA anthrax vaccine RFP.
Year: 2003;
Month: Aug;
Event: Health and Human Services (HHS) issues request for information
(RFI) for large-scale manufacturing capabilities for next generation
anthrax vaccines.
Year: 2003;
Month: Oct;
Event: NIAID awards Avecia and VaxGen contracts for second rPA RFP.
Year: 2004;
Month: Mar;
Event: HHS issues Strategic National Stockpile rPA anthrax vaccine RFP.
Year: 2004;
Month: July;
Event: President George W. Bush signs Project BioShield into law.
Year: 2004;
Month: Nov;
Event: HHS awards Strategic National Stockpile contract to VaxGen for
rPA anthrax vaccine procurement.
Year: 2005;
Month: May;
Event: HHS awards Emergent Strategic National Stockpile contract for 5
million doses of BioThrax Vaccine.
Year: 2005:
Month: June;
Event: Food and Drug Administration (FDA) issues draft Guidance for
Emergency Use Authorization of Medical Products.
Year: 2006;
Month: June;
Event: NIAID issues RFP for third-generation anthrax vaccine.
Year: 2006;
Month: Sept;
Event: HHS issues broad RFI regarding Technology Readiness Levels for
medical countermeasures.
Year: 2006;
Event: HHS issues draft Public Health Emergency Medical Countermeasure
Enterprise (PHEMCE) Strategy.
Year: 2006;
Month: Nov;
Event: FDA issues clinical hold notice on Vaxgen's trial.
Year: 2006;
Month: Nov;
Event: HHS issues "cure" notice on VaxGen.
Year: 2006;
Month: Dec;
Event: HHS terminates contract with VaxGen for rPA anthrax vaccine.
Year: 2007;
Month: Feb;
Event: NIAID cancels RFP for third-generation anthrax vaccine.
Year: 2007;
Month: Mar;
Event: HHS issues PHEMCE Strategy.
Year: 2007;
Month: Apr;
Event: HHS issues PHEMCE Implementation Plan.
Year: [Empty];
Month: Apr;
Event: Year: Biomedical Advanced Research and Development Authority
(BARDA) releases presolicitation notice for BioThrax.
Year: [Empty];
Month: May;
Event: BARDA releases sources sought notice for rPA vaccine.
Source: GAO.
[End of table]
[End of section]
Appendix II: Comments from the Department of Health and Human Services:
Note: GAO comments supplementing those in the report text appear at the
end of this appendix.
Department Of Health & Human Services:
Office of the Assistant Secretary for Legislation:
Washington, D.C. 20201:
October 4 2007:
Mr. Keith Rhodes:
Director/Chief Technologist:
Center for Technology and Engineering:
U.S. Government Accountability Office:
Washington, DC 20548:
Dear Mr. Rhodes:
Enclosed are the Department's comments on the U.S. Government
Accountability Office's (GAO) draft report entitled, "Actions Needed to
Avoid Repeating Past Problems with Procuring New Anthrax Vaccine and
Managing Stockpile of Licensed Vaccine" (GAO-08-88).
The Department has provided several technical comments directly to your
staff. The Department appreciates the opportunity to review and comment
on this draft before its publication.
Sincerely,
Signed by:
Rebecca Hemard for:
Vincent J. Ventimiglia;
Assistant Secretary for Legislation:
General Comments From The U.S. Department Of Health And Human Services
(HHS) On The U.S. Government Accountability Office's (GAO) Draft
Report: "Project Bioshield: Actions Needed To Avoid Repeated Past
Problems With Procuring New Anthrax Vaccine And Managing Stockpile Of
Licensed Vaccine" (GAO-08-88):
The U.S. Department of Health and Human Services (HHS) is grateful for
the opportunity to comment on the draft report from the U.S. Government
Accountability Office (GAO) entitled Project BioShield: Actions Needed
to Avoid Repeated Past Problems with Procuring New Anthrax Vaccine and
Managing Stockpile of Licensed Vaccine.
Overview:
Anthrax remains a top priority for the ongoing public health emergency
preparedness efforts at HHS, and the Department is committed to
developing and acquiring a robust portfolio of medical countermeasures
against this threat. This prioritization is reflected in the discussion
of anthrax medical countermeasures in the HHS Public Health Emergency
Medical Countermeasures Enterprise (PHEMCE) Implementation Plan for
Chemical, Biological, Radiological, and Nuclear (CBRN) Threats (HHS
PHEMCE Implementation Plan), providing a road map for future medical
countermeasure development and acquisition activities throughout HHS.
The Department continues to pursue a comprehensive strategy for the
development and acquisition of products to respond to the threat of
anthrax. Antibiotics represent the first line of defense to protect the
nation following an anthrax attack. We currently have over 40 million
courses of antibiotics in the Strategic National Stockpile (SNS).
Anthrax vaccines are also an essential element of our national
preparedness. Vaccines may be given as post-exposure prophylaxis in
combination with antibiotics to potentially provide longer-term
protection; this combination may also allow for a reduction in the
duration of the antibiotic regimen. HHS has awarded contracts for the
acquisition of nearly 30 million doses of anthrax vaccine since 2005,
including the recent contract award of 18.75 million doses of Anthrax
Vaccine Adsorbed (AVA, BioThrax(TM)). In addition, antitoxins are
necessary to treat individuals with advanced stages of infection, and
may contribute to a more successful therapeutic outcome. HHS has
awarded contracts to two manufacturers to deliver antitoxins sufficient
for treating 30,000 people. These vaccine and antitoxin contracts were
awarded under the authorities of the Project BioShield Act of 2004.
Maintaining a diversified medical countermeasure program requires a
number of concurrent initiatives to improve near-term preparedness
while also supporting the development of next- generation products. For
example, while procuring currently available anthrax vaccine, HHS is
using authorities made available under the Pandemic and Ml-Hazards
Preparedness Act of 2006 to invest over $40 million in the continued
development of an rPA anthrax vaccine. This investment complements the
rPA vaccine program that has been ongoing at the National Institute of
Allergy and Infectious Diseases (NIAID) since 2002. In addition, the
Office of the Biomedical Advanced Research and Development Authority
(BARDA) and NIAID released a Broad Agency Announcement in September
2007 that is designed to support multiple third generation anthrax
vaccine candidates.
(See comment 1):
This GAO report does not accurately and completely reflect the anthrax
vaccine programs at the Department of Health and Human Services.
Evaluations regarding past procurement activities:
(See comment 2):
must be considered in the context of the sense of urgency felt in the
aftermath of the 2001 anthrax attacks, and the authorities available to
HHS at the time. We are also concerned that the draft report fails to
recognize the many important strides made in the transparency and
effectiveness of medical countermeasure initiatives at HHS. The process
of developing the HHS PHEMCE Strategy and the HHS PHEMCE Implementation
Plan, published in the spring of 2007, brought together experts from
across the federal government to come to a consensus on priorities for
medical countermeasure development and acquisition. This process was
also informed by substantial input solicited at the 2006 BioShield
Stakeholders Workshop, and in response to the publication of the draft
HHSPHEMCE Strategy in September 2006. In addition, the public release
of these documents provided a clear signal of the path forward to our
external stakeholders. We continue to improve transparency and foster
strong relationships with product developers through the Enterprise
Stakeholder Workshops, BARDA Industry Day, and [hyperlink,
http://www.MedicalCountermeasures.gov], and through continued dialogue
with the public through other meetings and forums. Feedback about these
initiatives from our stakeholders has been universally positive and
encouraging.
Below, we have repeated each of the draft recommendations, and
responded to each.
Responses to GAO Recommendations Recommendation: To avoid repeating the
mistakes that led to the failure of the first rPA procurement effort,
we recommend that the Secretary of HHS direct ASPR, NIAID, FDA, and CDC
to ensure that the concept of use and all critical requirements are
clearly articulated at the outset for any future medical countermeasure
procurement.
Response: HHS agrees with the importance of clearly establishing and
articulating the concept of use and critical requirements for each
medical countermeasure. For this reason, many of the Requests for
Proposal (RFP) issued through BioShield are preceded by a Request for
Information (RFI) or draft RFP, to ensure that the final RFP is
informed by the best scientific and industry expertise possible. In
furtherance of this goal, HHS has published the HHS PHEMCE
Implementation Plan, which provides guidance concerning the priorities
and requirements for future medical countermeasures.
(See comment 3):
With respect to the rPA procurement process, the concept of use and
critical requirements for anthrax vaccine have not changed, and are
clearly articulated in many public documents from HHS, including the
HHS PHEMCE Implementation Plan. Anthrax vaccine is to be used in
combination with antibiotics as post-exposure prophylaxis. However,
more specific requirements for the formulation, dosage, and studies
necessary to achieve regulatory approval must be made on the basis of
each individual product, through the process of direct communication
with FDA that is undertaken by every medical product developer. Given
that the Project BioShield legislation provides for a time period of
eight years during which products must achieve licensure and that the
process of product development can be fraught with unexpected
complications and delays, it is nearly impossible to know the exact
regulatory specifications for a product at the beginning of this
process. Nonetheless, HHS has encouraged:
(See comment 4):
and now requires potential bidders to demonstrate early engagement with
FDA and understanding of regulatory requirements based upon those
discussions.
Recommendation: To ensure public confidence and comply with FDA's
current rules, we recommend that the Secretary of HHS direct ASPR to
destroy the expired BioThrax vaccine in the stockpile.
Response: HHS agrees with GAO that expired vaccines cannot be used. The
Department has never planned to use any expired products in an
emergency, and we strongly disagree with the claim that the Department
"planned to use three lots of expired BioThrax vaccine in the stockpile
in the event of an emergency". HHS fully understands the regulations
surrounding the use of expired medical products, and has no such plans
to administer expired doses of BioThrax. The expired vaccine in
question is being quarantined until a decision on disposition is made.
HHS continues to develop comprehensive life cycle plans for all medical
countermeasures in the SNS.
(See comment 5):
Recommendation: To minimize waste of the BioThrax vaccine in the
stockpile, we recommend that the Secretaries of HHS and DOD develop a
single integrated inventory system for the licensed anthrax vaccine
with rotation based on a first-in, first-out principle.
Response: HHS agrees with the importance of an inventory management
strategy to minimize attrition of BioThrax vaccine doses in the SNS
resulting from expiration of the product. The Department is engaged in
a broad effort to develop comprehensive life cycle management plans for
all medical countermeasures in the SNS. To this end, HHS and the
Department of Defense (DOD) are currently exploring a number of
inventory management strategies that would include potential exchange
of BioThrax between the HHS and DOD stockpiles. However, there are
important liability issues and funding differences between DOD and HHS
contracts that currently preclude this exchange. These issues are
currently the focus of work by both Departments. The efficient transfer
of short-dated vaccine from HHS to DOD could save the US Government up
to $25 million per year. The report inaccurately claims that the amount
of money lost is "over $100 million per year".
{See comment 6 and comment 7):
The very nature of these products dictates that they have a fixed
dating period. If not used during an event, all medical countermeasures
will eventually expire and will need to be properly discarded. HHS
continues to work diligently as an effective steward of its
investments, and seeks to limit unnecessary spending as much as
possible, but it is inaccurate to suggest that all expired product
represents wasted or lost investments.
{See comment 8):
HHS Response to GAO Findings:
In addition to our response to specific GAO recommendations above, we
would like to correct several particular misconceptions and
inaccuracies contained in the draft report.
First, HHS strongly disagrees with the assertion that VaxGen's
candidate rPA vaccine was not sufficiently advanced to warrant a
Project BioShield contract award. The Project BioShield Act of 2004 is
intended to allow medical countermeasure contracts to be awarded that
support both product development and acquisition activities. The VaxGen
contract award was wholly consistent with the terms of the legislation,
and this was validated through findings of an investigation by the HHS
Office of the Inspector General. However, we recognize that commitments
to acquiring products at early stages of development adds risk and
uncertainty to the program. This risk was deemed to be appropriate
given the urgency of the requirement. Additionally, HHS was continuing
to support another rPA vaccine candidate through research and
development contracts at NIAID. Fortunately, through modifications to
the Project BioShield Act instituted in the Pandemic and All-Hazards
Preparedness Act of 2006, BARDA now has the ability to include
milestone payments in these contracts that will provide financial
support for manufacturers as important product development activities
are completed. BARDA is working to incorporate these payments into its
future Project BioShield procurements, but this mechanism was not
available to be used for the VaxGen rPA contract.
{See comment 9):
The report also claims that the evaluation of VaxGen's rPA vaccine
candidate was a subjective one. HHS maintains stringent processes to
evaluate objective criteria and make the most appropriate contract
awards. The determination of capabilities of the four different
manufacturers who responded to the Request for Proposals (RFP) was
based on a rigorous technical evaluation process. In addition, a
Request for Information (RFI) for rPA vaccines was released in 2003,
and those results were used to inform the requirements of the RFP in
2004. The responses to the RFI indicated that the anticipated timeline
for rPA development and acquisition was achievable. The respondent to
any solicitation is required to provide a full and honest assessment of
their technical and financial capabilities. At the time of contract
award, VaxGen provided the government with comprehensive project plans
and timelines that projected a successful vaccine development and
manufacturing process.
{See comment 10):
It is also important to note that, contrary to that stated in the draft
report, the VaxGen Project BioShield award did not pre-empt other
support for product development that was being provided to VaxGen
through its NIAID contract. Simultaneously, HHS continued to support
development programs by other anthrax vaccine manufacturers with grants
administered by NIAID.
(See comment 11):
Next, it is inaccurate to state that "the purchase of BioThrax for the
stockpile as a stopgap measure raised the bar for the VaxGen vaccine."
The minimum amount of data and information needed to consider VaxGen's
rPA vaccine potentially "usable" under either a "Contingency Use" IND
or, subsequently, an EUA, did not change because there was a stockpile
of BioThrax. Although the necessary data and information to support the
use of the rPA vaccine in an emergency did not change, the likelihood
of using the rPA in an emergency was reduced given ASPR's decision to
first use the licensed BioThrax. Furthermore, using this logic, HHS
could never buy existing medical countermeasures while next-generation
products were in:
(See comment 12):
development. Maintaining a robust product pipeline requires concurrent
efforts to improve near- term preparedness by acquiring available
products while also supporting the development of improved next-
generation products. More specifically, we do not see any particular
characteristics of the BioThrax products that would adversely impact
the expectations for an rPA vaccine.
The draft report claims that HHS changed the requirements for the
VaxGen rPA vaccine. However, the requirement for the acquisition of 25
million courses of anthrax vaccine was established following medical
consequence modeling and input from public health experts. Since the
Project BioShield legislation provides for up to eight years of
development prior to achieving licensure, it is very difficult to
predict when a contract is awarded exactly what the required studies
and specific characteristics of each product will be. To resolve this
problem, HHS is very clear that any companies interested in responding
to a solicitation will be in frequent contact with the Food and Drug
Administration (FDA) to keep the FDA up-to-date with their progress and
to maintain a clear understanding of the studies that will be required
for their product to achieve licensure. It is now a requirement of
Project BioShield contracts that companies communicate with FDA early
and often to ensure the success of each acquisition program.
(See comment 13):
In the field of medical product development, it is the responsibility
of all manufacturers to be responsive to and communicative with FDA,
and to incorporate regulatory feedback into their product development
plans. Over the course of the VaxGen rPA contract, HHS was similarly
responsive to the evolution of the candidate product. VaxGen
experienced a failure in its Phase 2 clinical trial in 2004 that
produced results that could not be interpreted. As a result of this and
other product development delays, HHS instituted a contract
modification that extended VaxGen's delivery schedule for an additional
three years. It is not clear that VaxGen made equivalent efforts to
remain aware of FDA guidance. There are no regulated or mandated
timelines for development of a new product. The interactions of FDA's
Center for Biologics Evaluation and Research (CBER) with VaxGen were
typical of those with any sponsor during the IND stages of development
of any product, especially during early stages, prior to VaxGen getting
the BioShield contract. Post-contract award, November 2004, VaxGen,
CBER and other HHS agencies had frequent meetings and extensive
technical discussions to aid in development of this important product.
VaxGen did not request information regarding the specific data and
information needed by CBER to potentially allow use under a
"Contingency Use" IND, as specified in the RFP, until December 2005, so
they could more appropriately account for development costs, predict
manufacturing and delivery timelines and have a clear understanding of
the criteria which would make their product considered "usable (term
used by HHS)" and thus appropriate for acquisition and stockpiling.
CBER provided this information in January 2006.
One of the central claims of this report is that product requirements
were not known to VaxGen at the outset of the procurement contract. As
with any medical product development program, it is the responsibility
of the manufacturer to engage effectively with FDA. It is also unclear
what GAO is trying to convey by the following two sentences: "This
confused FDA officials and:
(See comment 14):
caused them to balk at replying to VaxGen until it could meet with ASPR
and CDC to clarify this issue. As a result, VaxGen was placed in a
position where it had to respond to different requirements." The
meeting referenced occurred in December 2005. It is also CBER's
impression that VaxGen wanted the next Phase II trial to support use of
the vaccine in a "contingency use" protocol under IND. However, the
purpose of Phase H trials, in order to position the product for the
pivotal Phase III trial in support of licensure, is to collect
additional safety, and when possible efficacy data, as well as to
determine the dose, route and schedule for administration. Since VaxGen
had not previously requested information regarding the specific data
and information needed by CBER to potentially allow use under a
"Contingency Use" IND, as specified in the RFP, it appears that VaxGen
may not have clearly understood that the data needed to support this
use should be gathered using final drug product administered by the
dose, route and schedule determined to be most immunogenic and safe in
the Phase II trials. Since CBER was asked the question regarding use
during an emergency during this meeting, CBER needed time to respond
and provided the information in January 2006.
The report also makes inaccurate statements regarding Emergency Use
Authorization guidance from FDA. The draft guidance "Emergency Use
Authorization of Medical Products" which was issued in June 2005, and
published as final guidance in July 2007, was drafted directly from and
intended to provide information regarding the Agency's current thinking
concerning one way to meet the statutory requirements defined in
Section 564 of the Federal Food, Drug, and Cosmetic Act, as it was
amended by the Project BioShield Act of 2004. Section 564 is self-
executing and does not require implementing regulations or guidance. As
stated in the guidance "The document is intended to inform industry,
government agencies, and FDA staff of the Agency's general
recommendations and procedures for issuance of EUAs." It goes on to
clarify that the amount of data and information needed will be
determined on a case-by-case basis and that this document summarizes
the types of data that FDA would recommend submitting. The EUA guidance
also discusses the conditions that must be met to authorize use of a
product under an EUA, as well as other conditions of authorization that
may be imposed. In discussing these issues, the guidance clarifies that
the exact type and amount of data may vary depending on the nature of
the declared emergency and the product under consideration.
(See comment 15):
HHS is dedicated to building a comprehensive stockpile of medical
countermeasures that would be available in the case of a public health
emergency. The very nature of these products dictates that they have a
fixed dating period. If not used during an event, all medical
countermeasures will eventually expire and will need to be properly
discarded. However, all expired product does not represent wasted or
lost investments, and it is disingenuous to suggest as much. HHS
continues to serve as a responsible and effective steward of its
investments as it works to achieve our mission to prevent, prepare for,
and respond to the adverse health effects of public health emergencies.
(See comment 16):
The following are GAO's comments on the Department of Health and Human
Services' letter dated October 4, 2007.
GAO Comments:
1. Our draft report acknowledged the Office of the Assistant Secretary
for Preparedness and Response's (ASPR) sense of urgency to develop an
rPA anthrax vaccine following the 2001 attack. However, our report also
stated that by November 2004, ASPR had had sufficient time and
opportunity to thoroughly evaluate contractual risks and issues without
being overly influenced by the sense of urgency. By November 2004, it
was clear that significant manufacturing issues needed to be overcome
and that a 2-year time scale to produce 25 million doses was
accordingly unrealistic.
2. We agree that ASPR has taken several steps to develop and
communicate its strategy and plans to acquire medical countermeasures
to potential manufacturers. In addition, HHS has conducted several
workshops to stimulate discussion with potential manufacturers.
However, these steps were taken just before or after VaxGen's
procurement contract was terminated. While we reviewed the HHS Public
Health Emergency Medical Countermeasures Enterprise Strategy and
Implementation Plan for Chemical, Biological, Radiological, and Nuclear
Threats, we did not find these documents to be relevant to our
evaluation of ASPR's performance with regard to VaxGen's procurement
contract.
3. ASPR's definition of the concept of use refers, as expressed in its
comments, to the anthrax vaccine in combination with antibiotics as
post-exposure prophylaxis. However, our report discusses the potential
use of the unlicensed rPa vaccine in the stockpile when the licensed
anthrax vaccine was already available. We cite the Food and Drug
Administration's position that it would give preference to the licensed
vaccine over the unlicensed vaccine.
With regard to critical requirements, HHS acknowledged that critical
requirements would change for different products. Therefore, HHS should
have known the consequences of changing requirements for a fixed-price
contract with a 2-year time limit.
4. We agree with HHS that it is not always possible to know the exact
regulatory specifications for a product at the beginning of the
procurement process. However, ASPR failed to recognize that changing
requirements under a fixed-price procurement contract could
significantly affect the finances and the 2-year delivery time line it
established.
5. The acting director of ASPR told us that the principal deputy of
ASPR had decided not to destroy the expired lots in case they were
needed for use in an emergency. However, using the expired vaccine
would violate the FDA rule. In response to the draft of this report,
HHS now states that it is quarantining the expired lots until a
decision can be made regarding disposal. We do not understand HHS's
rationale for continuing to hold the vaccine in quarantine for nearly a
year and the justification for the administrative expenses involved.
6. Although HHS and the Department of Defense (DOD) use different
authorities to address BioThrax liability and funding issues, both
authorities could apply to vaccines purchased by either DOD or HHS;
consequently, indemnity does not appear to be an insurmountable
obstacle for future procurements. As indicated in our report, DOD and
HHS should continue to explore the legal implications of different
indemnity authorities and present a legislative proposal to Congress if
they determine that a statutory change is required to establish a joint
inventory.
7. Since, as ASPR acknowledges, it does not have a strategy to minimize
waste, we calculated the potential $100 million annual wastage based on
expiration dates of the current vaccine inventory. ASPR stated that the
annual saving would only be up to $25 million per year but did not
provide any basis for this estimate. However, according to DOD, in
contract year 2006, it purchased BioThrax valued at about $55 million,
a savings of more than double ASPR's estimate.
A strategy to minimize waste in the stockpile should include not only
integration of inventory based on a first-in, first-out principle but
also reexamination of requirements derived from consequence modeling
with regard to the size of the inventory. Such a strategy would result
in savings closer to $100 million.
8. We did not mean to suggest that all expired products represent waste
or lost investment. We clarified our definition of waste in the report.
When there is a large-volume user for the stockpile product, not having
an effective strategy to ensure that stockpile product would be used
constitutes waste. However, since DOD is a large user of BioThrax,
unnecessary waste will result from ASPR not making an effort to ensure
that to the extent possible, DOD uses the vaccine in the stockpile.
9. We did not question the legality of the contract award to VaxGen but
rather the rationale underlying the contract's requirement for 25
million doses in 2 years.
10. ASPR officials told us that they did not have tools to assess
product maturity at the time of the contract award, and that they were
guided by a sense of urgency. On the basis of these statements, we
concluded that their assessment was subjective.
11. We disagree that the VaxGen Project BioShield award did not preempt
other support for product development that was being provided to VaxGen
through its National Institute of Allergy and Infectious Diseases
contract. According to our analysis of the contract document and
discussions with NIAID officials, funding under the development
contract largely ceased once the procurement contract was awarded.
12. We clarified the report text to attribute to VaxGen officials the
statement that the purchase of BioThrax for the stockpile as a stopgap
measure raised the bar for the VaxGen vaccine.
13. Our draft report did not say that HHS changed the requirements for
the VaxGen rPA vaccine. However, we have clarified the text to state
that purchase of BioThrax for the stockpile raised the requirement for
the use of rPA anthrax vaccine.
14 We clarified the report text to indicate that neither FDA nor VaxGen
understood the concept of use prior to January 2006.
15. We clarified the report text to indicate that ASPR officials told
us that FDA would define "sufficient data" and the testing hurdles a
product needed to overcome to be considered a "usable product."
16. See our response to comment 8.
[End of section]
Appendix III: Comments from the Department of Defense:
Assistant To The Secretary Of Defense:
3050 Defense Pentagon:
Washington, DC 20301-3050:
Nuclear And Chemical And Biological Defense Programs:
October 3, 2007:
Mr. Keith Rhodes:
Director/Chief Technologist, Center for Technology and Engineering:
U.S. Government Accountability Office:
441 G Street, N.W.:
Washington, DC 20548:
Dear Mr. Rhodes:
This is the Department of Defense (DoD) response to the GAO draft
report 08-88, "Project Bioshield: Actions Needed to Avoid Repeated Past
Problems with Procuring New Anthrax Vaccine and Managing Stockpile of
Licensed Vaccine," dated September 20, 2007, (GAO Code 460590).
The Department partially concurs with the GAO recommendation. Our
position on this recommendation is explained in the enclosure.
My point of contact for this matter is Dr. Robert Borowski, who can be
reached at (703) 416-4682 or at Robert.Borowski@anser.org.
Signed by:
David G. Jarrett, COL, MC, USA:
Deputy and Medical Director:
OSA(CBD&CDP):
Enclosure:
GAO Draft Report Dated September 20, 2007 GAO-08-88 (GAO CODE 460590):
"Project Bioshield: Actions Needed To Avoid Repeated Past Problems With
Procuring New Anthrax Vaccine And Managing Stockpile Of Licensed
Vaccine":
Department Of Defense Comments To The Gao Recommendation:
Recommendation: The GAO recommends that in order to minimize waste of
the BioThrax® vaccine in the stockpile, HI-IS and DoD develop a single
integrated inventory system for the licensed anthrax vaccine with
rotation based on a first-in, first-out principle. (p. 25/GAO Draft
Report)
DOD Response: The DoD partially concurs with the GAO recommendation. •
While the recommendations in the draft GAO report have merit, it should
be underscored that there are operational, logistical, and legal
challenges to implementation that may require potential legislative
action to overcome.
(See comment 1):
* Logistical challenge: The HHS stockpile is far larger than the amount
DoD consumes on an annual basis and hence, if a joint stockpile is
created, DoD will only be able to use a fraction of the expiring doses.
It should also be noted that DoD can not distribute expiring stocks at
the last minute and would require some level of lead time to distribute
and dispense the soon-to-expire stocks. The DoD will also work with HHS
to specifically analyze the potential cost avoidance with the proposal.
* Legal challenge: DoD and HHS have differing methods of liability
protection. DHHS plans to use the Public Readiness and Emergency
Preparedness (PREP) Act provisions to limit the liability of
manufacturers of medical countermeasures, versus DoD's use of P.L. 85-
804 indemnification. DoD has identified this area of differing methods
of liability protection as one that will require further discussion
between the agencies' legal staffs. This area may require legislative
action to ensure that vaccine purchased by DHHS can be used in the DoD
immunization program.
* The DoD and HI-IS have been and will continue to coordinate the
actions of this effort in the best interests of the United States
Government.
Note: GAO comments supplementing those in the report text appear at the
end of this appendix.
See comment 1.
The following is GAO's comment on the Department of Defense's letter
dated October 3, 2007.
GAO Comment:
1. Although HHS and DOD use different authorities to address BioThrax
liability, both authorities could apply to vaccines purchased by either
DOD or HHS; consequently, indemnity does not appear to be an
insurmountable obstacle for future procurements. As indicated in our
report, DOD and HHS should continue to explore the legal implications
of different indemnity authorities and present a legislative proposal
to Congress if they determine that a statutory change is required to
establish a joint inventory.
[End of section]
Footnotes:
[1] The vaccine based on rPA is often referred to as a second
generation anthrax vaccine to differentiate it from BioThrax.
Recombinant refers to a product created using a genetic engineering
technology in which one or more pieces of DNA are combined together. A
protective antigen is a biochemical that produces an immunologic
response that then protects animals or humans against challenges from
the infectious agent.
[2] National Institute of Allergy and Infectious Diseases, "Production
and Testing of Anthrax Recombinant Protective Antigen (rPA) Vaccine."
Request for Proposal (RFP) No. NIH-NIAID-DMID-03-29.
[3] B. Ivins and others, "Immunization Studies with Attenuated Strains
of Bacillus anthracis," Journal of Infection and Immunity, 52(1986):454-
58. B. E. Ivins, "The Search for a New-Generation Human Anthrax
Vaccine," Clinical Immunology Newsletter, 9(1988): 30-32; and Y. Singh
and others, "Study of Immunization against Anthrax with the Purified
Recombinant Protective Antigen of Bacillus anthracis," Journal of
Infection and Immunity, 66(1998): 3447-48.
[4] Institute of Medicine, The Anthrax Vaccine: Is It Safe? Does It
Work? (National Academy Press: Washington, D.C., 2002), p. 20.
[5] Stewart Simonson, Assistant Secretary, Department of Health and
Human Services, Office of Public Health and Emergency Preparedness (now
ASPR), testimony before the Senate Committee on Appropriations,
Subcommittee on Homeland Security, April 28, 2005.
[6] he Office of the Assistant Secretary for Preparedness and Response
(ASPR) is the lead agency within HHS on this issue. These offices have
undergone several name changes. ASPR was formerly the Office of Public
Health Emergency Preparedness (OPHEP) and was renamed pursuant to
Public Law 109-417, the Pandemic and All-Hazards Preparedness Act in
December 2006. The name OPHEP was created administratively in August
2004. Prior to that change, the office was called the Office of the
Assistant Secretary for Public Health Emergency Preparedness (ASPHEP),
pursuant to Public Law 107-188, the Public Health Security and
Bioterrorism Preparedness and Response Act of 2002. Briefly, before
that change, it had been called the Office of Public Health
Preparedness, which was created administratively in January 2002. In
July 2006, Office of Public Health Emergency Medical Countermeasures
(OPHEMC), an office within ASPR, was renamed, replacing the name Office
of Research and Development Coordination. ORDC was created
administratively within ASPHEP in December 2002. OPHEMC has been
renamed Biomedical Advanced Research and Development Authority (BARDA).
[7] The Strategic National Stockpile, formerly known as the National
Pharmaceutical Stockpile, contains pharmaceuticals, vaccines, medical
supplies, and medical equipment to respond to terrorist attacks and
other emergencies.
[8] The Department of Homeland Security provides indemnification to the
manufacturer of BioThrax for civilian use of the vaccine.
[9] GAO, Anthrax: Federal Agencies Have Taken Some Steps to Validate
Sampling Methods and to Develop a Next Generation Anthrax Vaccine, GAO-
06-756T (Washington, D.C.: May 9, 2006) pp. 20-21.
[10] Stability refers to the physical, chemical, biological,
biopharmaceutical, and microbiological characteristics of a vaccine,
during and up to the end of the expiration dating period and storage
periods of samples under expected handling and storage conditions. The
results of stability studies are used to recommend storage conditions
and to establish the shelf life and/or the release specifications.
[11] Scale-up production occurs when the decision is made to take a
vaccine produced in small amounts in a pilot facility and increase
production to commercial levels. This is one of the most difficult,
complex, time-consuming, and resource-intensive aspects of vaccine
development for manufacturers.
[12] HHS issued a Source Sought Notice in May 2007.
[13] All vaccines will eventually expire. However, when there is a
large-volume user for stockpile product, not having an effective
strategy to ensure stockpile products would be used constitutes waste.
[14] Indemnification was originally granted by DOD to the manufacturer
in the late 1990s because of the manufacturer's inability to get
commercial insurance at a reasonable price.
[15] FDA regulations do allow the extension of the expiration date of a
vaccine under certain limited circumstances. See 21 C.F.R. 610.53.
[16] GAO, Anthrax Vaccine: GAO's Survey of Guard and Reserve Pilots and
Aircrew, GAO-02-445 (Washington, D.C.: Sept. 20, 2002).
[17] Biological products are typically derived from living sources,
such as humans, animals, bacteria, and viruses.
[18] Centers for Disease Control and Prevention, Vaccine Management:
Recommendations for Storage and Handling of Selected Biologicals,
(Atlanta, Georgia: January 2007).
[19] FDA will permit an investigational drug to be used under a
treatment IND if there is preliminary evidence of drug efficacy and the
drug is intended to treat a serious or life-threatening disease or if
there is no comparable alternative drug or therapy available to treat
that stage of the disease in the intended patient population.
[20] Immunogenicity" refers to the ability of a vaccine to stimulate a
protective immune response.
[21] When FDA decides to halt drug development activity, it issues a
"clinical hold," which begins a series of review activities.
[22] The contract called for 75 million doses overall, but only 25
million were required within 2 years of award.
[23] Pharmaceutical and biotech firms follow the cGMP to ensure that
the products produced meet specific requirements for identity,
strength, quality, and purity. FDA regulates these industries to ensure
cGMPs are being followed.
[24] Industry experts told us that even this time scale is very
optimistic.
[25] TRLs have been used by federal agencies (DOD, the National
Aeronautics and Space Administration, and others) to assess the
maturity of evolving technologies prior to incorporating that
technology into a system or subsystem. The primary purpose of using
TRLs is to help management in making decisions concerning the
development and transitioning of technology.
[26] In December 2006, at the time the contract was terminated,
according to ASPR officials, the TRL level was still at 8.
[27] A clinical hold is the mechanism that FDA uses to stop a study
when it finds that the study should not proceed because of an
identified deficiency. When the deficiency is identified in FDA's
initial review of the IND application, FDA contacts the sponsor within
30 days of submission of the IND. FDA may also impose a clinical hold
on an ongoing study based on its review of newly submitted protocols
and amendments, safety reports, or other information. When a clinical
hold is issued, a sponsor must address the issue before the hold is
removed. FDA has issued a regulation that identifies the deficiencies
that provide the basis for a clinical hold. A clinical hold may be
imposed, as in this case, because a plan or a protocol for the
investigation is clearly deficient in design to meet its stated
objectives. All clinical holds are reviewed by FDA management to ensure
consistency and quality in FDA's clinical hold decisions.
[28] An assay is a laboratory test or procedure carried out in order to
measure the amount of a substance present in a product and/or to
measure its activity.
[29] Under Project BioShield, advance payments of up to 10 percent of
the contract value could be made if the HHS Secretary deemed it
necessary for the success of the program. ASPR officials told us that
VaxGen did request such a payment, but ASPR did not grant it.
[30] FDA is ultimately responsible for determining if available
products (unapproved products or approved products for unapproved
usage) in the stockpile can be used in an emergency. The data FDA needs
to determine whether a product can be used in an emergency are critical
to manufacturers to adequately plan and estimate the time and resources
required for generating the data.
[31] It also requires an approval from the Institutional Review Board.
[32] See FDA's minutes of the December 2005 meeting with VaxGen.
[33] In commenting on the draft report, FDA indicated that the purpose
of the phase 2 trial is to collect additional safety and, when
possible, efficacy data, as well as to determine the dose, route, and
schedule for administration.
[34] This is a requirement of the BioShield law.
[35] These lots contained 167,990, 168,130, and 183,990 doses of
vaccine respectively.
[36] In 1999, CDC created a stockpile of licensed medical products. CDC
officials told us that CDC had a strategy to rotate products in that
stockpile on a first-in, first-out principle with other high-volume
users, such as the Department of Veterans Affairs.
[37] See footnote 15.
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