so the vice president is the only person that can cut through that, talk to the private sector and simultaneously talk to state and local governments. and put all those pieces together. he's also the only person that can demand a unified budget out of the omb and across the government. >> this was a bipartisan recommendation. >> it was a bipartisan recommendation. i have to tell you, i hesitated, as someone who sat in a government agency, a powerful government agency, i hesitate to transfer power to a vice president or to the white house in general. as you know, cabinet agencies have a certain amount of tension with white houses. but at the end of the day, this is one of the areas where you need a unified budget. the only other place we have a unified budget is actually in intelligence.

so this is a parallel to that, to pull all the pieces together. and it's important enough to identify the vice president. and vice presidents always have some time to take on other responsibilities. >> thank you very much. thanks. >> with all due respect to our very nice vice president. >> i'm sure he will be pleased you said he had lots of time on his hands. we now recognize -- >> we have discussed this with the current vice president. it's not he particularly that we identified, but the office itself. >> right. right. >> we will bring him in here and ask him about that. recognize mr. flores for five minutes. >> hard to follow that. dr. parker, you emphasized in your testimony we should be urgently preparing for biological threats in the time between outbreaks. in 2006, congress created brta to do exactly this. as you explained, we continue to seem to go in crisis mode only when we have an outbreak.

what else should the government do in these inter-epidemic periods? >> thank you, congressman flores. actually, in answering your question, i'm going to come right back to the centralized leadership and how important that is. i will answer it actually with an example. in my own experience, my own career, and that very same time in 2006, as the pandemic and all hazards preparedness act was passed, brta was created, we got very concerned about pandemic influenza to the point that an emergency supplemental was appropriated in that time, $6 billion, $7 billion. it was accompanied by a very strong white house-led pandemic influenza strategy coupled to a pandemic influenza implementation plan.

this is the closest example i think that has happened to date that kind of reflects the centralized leadership biodefense strategy that we actually did for pandemic influenza that accompanied an appropriation that really covered almost all the department agencies, state, local, private sector. they were involved in pandemic preparedness back at that time. this implementation plan contained over 300 action items. it identified lead department agencies and supporting department agencies. it was very detailed. in fact, in my own department at the time, hhs, there was a lot of complaints that it was micromanaging and maybe superseding department authorities. maybe it was. but we got stuff done. it allowed us to accomplish things that otherwise, we would not have been able to do.

so i just offer that as an example of something that we have already done -- let me also add that we had -- we were very responsible for meeting our milestones of metrics that were part of this implementation plan, both in the executive branch and to congress, because all congressional committees that had the appropriate oversight for their department agencies were regularly being updated, hearings were happening on progress of that plan. so i just offer that up as an example of something in the past that i think is in the spirit of what the panel has recommended that would drive us a long way forward to doing what we need to do in that inter-epidemic period and before an attack occurs. >> thank you. i think that's helpful. i also want to compliment you on the great work you are doing in

the brta public/private partnership. dr. till, the world health organization recently assessed the impact of synthetic biology on smallpox preparedness and control, and the scientific group found the risk of re-emergence of smallpox is increased due to the low cost and widespread availability of technology and know-how on how to create the smallpox virus. so the brsp relied -- or focused heavily on the threats that we face today. can you tell me what's possible given the rapid advances in synthetic biology and how have these advances in synthetic biology escalated the threat? >> virtually anything is possible today, theoretically. smallpox is an ancient huge virus. it would be very difficult to create synthetically.

a functional smallpox virus. there are many other choices available. we know, for example, that the soviets created a vaccine resistant plague strain. new gene editing techniques make that kind of creation of resistant viruses quite straightforward, although non-resistant pathogens can do a great deal of damage, too. i'm not sure it makes sense to go to the trouble of making a synthetic bug. but what we are missing is the opportunities on the upside that synthetic biology and other advances allow. okay? i mean, we are in a revolutionary fight as a biological science and virtually none of this is being leveraged against our biodefense needs. we need a lot more than improved contracting procedures in barta. we need a commitment to revolutionize the way we make vaccines.

same thing with diagnostics. we can do this. we can shift the advantage to biodefense but we can't do this with incremental tweaks on the programs we have now, in my opinion. we need a much deeper investment in bioscience and biotech. >> thank you. that's helpful. i will be exhausted by the time i yield back. thank you. >> thank you, mr. chairman. welcome to our witnesses. dr. o'toole, in your testimony, you speak of the need to take advantage of recent developments in bioscience to rapidly develop tests and manufacture vaccines against emergent infectious diseases. can you speak to the role that the centers for innovation and advanced development and technology play in this process? and is this program indicative of the types of public/private partnerships we should be pursuing in this space? >> i'm sorry.

>> centers for innovation and advanced development in technology. >> yes. they can play a very critical role. for example, new diagnostics have a very difficult time getting approval to be paid for. so that discourages innovative biotech companies from making them. imagine the difference it would make if we had a rapid diagnostic test right now for zika and we could very clearly say you're infected, what is the outcome of your pregnancy, or you're not affected. same thing for ebola. imagine if we were able to tell within minutes if somebody was infected with ebola. preferably before they're symptomatic. the technologies for a whole host of new diagnostics are out there. the path to making money on them is very, very troubled both from a regulatory point of view, it's almost as hard as it is to get a new drug through, and the return on investment is not nearly as great, and also, from the payment mechanism. so yes, the centers have a tremendous role to play.

>> thank you. and secretary shalala, how does the first recommendation that you have shared with us today get off the ground? should there be a congressional mandate to have the executive branch explore and implement if experts agree it's needed? what are the next steps to take us forward? >> you know, i'm not sure what the answer to that question is, whether congress can designate the vice president of the united states. it's a different branch. you certainly can make a recommendation in this area and i think the fact that this committee would make a recommendation as part of a more integrated piece of authorizing legislation would have an effect.

it is a new recommendation. if you look through all the other commission reports, this is the first time this has been elevated to this level. so i think both a combination of the visibility and some enthusiasm from congress from this committee in particular would convince the next president of the united states to look at it very seriously. and, of course, there are budget implications in that, particularly tying it to an integrated budget approach, which i think we all think is extremely important, and in which there have been very few examples at a very high level of probably intelligence is the major one. the defense kinds of ones, you know, the defense agency itself usually leads. so it would take some identification by this committee, i think that would make a difference. >> congressman, can i get 15 seconds on that? >> sure. >> i'm not a lawyer, let alone a constitutional lawyer, but i

think that the congress can provide the authorization to the vice president and then perhaps it's up to the president and vice president to decide to utilize that authorization, but i think that's probably the way it would work. >> thank you. thank you to both of you. secretary shalala, given the complications created by transferring technology from an innovator company to the centers for innovation and advanced development and technology, do you believe it would be beneficial to establish a single location wherein the complete process from innovation to manufacture can take place quickly and nimbly in order to rapidly respond to the various emerging threats? >> you know, periodically, the leaders of government on both parties have looked at that process and seen whether we can fast track it so that we can get products faster to market. there are so many jurisdictional issues.

if a product has to go through the fda process, for example, if it's exempted from the fda process. so i think that that's an example where a vice president, looking at the process and making recommendations about the integration, because it's a piece of the larger strategy where that would make a difference. we certainly did that when we looked at, during my time, when we looked at fast-tracking aids drugs, for example and we were able to take different elements and put them together in a way that protected safety but also moved the needle very quickly in that area. but that's why, because there are so many agencies of jurisdiction, you need someone to think it through. >> thank you to each of you. mr. chair, i yield back. >> thank you. i now recognize ms. brooks for five minutes.

>> thank you, mr. chairman. thank you to our esteemed panel for being here today. i was a u.s. attorney in 2001 and was part of the response in the anthrax attacks, and actually had an office where that powder was sent to -- you know, multiple government offices were receiving powder which terrified that employee who opened the mail, not knowing if it was actually anthrax or if it was just powder. and i have to tell you, i thought, i was in federal service until '07 and felt like we were moving forward, but i have to tell you, until this report came out and until we have seen kind of the lack of adequate response to ebola quite frankly, i really do believe we have stepped back and that we have just moved from crisis to crisis. but i just encourage my colleagues -- this is an outstanding report with 33 recommendations. it is a road map. it is a blueprint. and it is in part on the basis

upon which the congresswoman and i introduced 3299, the strengthening public health emergency response act of 2015. i want to talk about that, because i really appreciate all of these recommendations. i encourage my colleagues throughout congress to read this book, because you as experts talked to experts around the country as well. it's not just the people on the panel. a lot of work went into this. i commend your work. mr. greenwood, can you please share with us the merit that you see in returning the contracting authority to barda, back to barda, which is in my bill, and can you talk about the importance of that and what has happened and why we're not able to get vaccines and medical countermeasures through the pipeline as fast as we need them? >> thank you. originally, the contracting authority was with barda and it was changed.

it was moved, i will refer to my notes here, it was moved to the office, an office called the acquisitions management contracts and grants office. the problem is that the technical experts are not there. and they are in fact at barda. in fact, because of certain regulations, there's a firewall between the two and sometimes they actually cannot speak to one another. so this is -- imagine how frustrating it is for a company trying to get a contract and it's talking to the folks who know a lot about contracts but they don't know a lot about this issue, about medical countermeasures. so i think it makes all the sense in the world to eliminate that level of bureaucracy, put the contracting back at barda where it belongs so that the experts in the field can talk to the experts in the company with whom they are attempting to create contracts. >> thank you. with respect to the companies trying to get vaccines into our

stockpiles, can you and dr. shalala please talk about the fact that we don't have a sufficient coordinating mechanism in our national strategic stockpile also identified? so we don't even have, if i'm not mistaken, the right coordination between cdc and barda to have the right vaccines in our stockpile. can you talk about that? >> yes. we made recommendations in that regard because the system is weak now and needs to be strengthened. thank you, congresswoman, for your leadership on this issue as well. >> thank you. mr. greenwood, any comments with respect to the stockpile? >> it goes to the central point which is that we are -- that we are not organized as a government to effectively and quickly respond to either pandemics or bioterror because the authorities are diffuse, they don't always talk to one another and that is exactly why a central unified plan, strategic plan, a central budget and giving the authority to the

vice president makes all the sense. >> i think citizens believe and know we have these stockpiles and believe that they are adequately filled with the proper types of vaccines. would anyone else like to comment on our national strategic stockpile? dr. o'toole? >> i'm the chair of a national academy committee on the strategic national stockpile right now. they have made tremendous progress in the last 20 years. the problem with the stockpile is that the new drugs that are going into it are largely biologicals and they are very expensive and they expire in two and three years. so there's a pipeline of new countermeasures coming in that increases the cost of the stockpile and everybody's budget is staying flat. so the limitations on the countermeasures we have in the stockpile first of all are budgetary limitations.

this is an expensive proposition. the stockpile already hold about $7 billion worth of stuff. but we are talking about having to cover multiple cities with these sometimes very expensive drugs and vaccines. we need a cheaper way to do it which is why i say you are never going to be able to create a stockpile that has everything you want in it against every contingency. we have to move to a strategy of being able to quickly design and manufacture and scale what we need. >> thank you all for sounding the alarm. appreciate your leadership. i yield back. >> i recognize mr. mullen for five minutes. >> thank you, chairman and thank you for the witnesses for being here. i first want to thank ms. shalala and mr. greenwood for this report. i will tell you the more that i learn about it, the more i wish i wouldn't read it.

i'm serious. it's very troubling when you understand the false security that we have, even from something as simple yet dangerous as the flu to the most serious threats that we're facing today, and in a previous hearing, i was talking about our cdc's national stockpile, strategic stockpile that we have, and in particular, the weaknesses that we have there, and to follow on miss brooks here, i want to get a little bit more in depth about what you see as maybe our biggest weakness, maybe the biggest two weaknesses, some of the most -- some of the biggest threats we have with the stockpile, some recommendations. don't get into it too deep, just maybe one or two that we can start working on in the committee here.

>> well, i actually think dr. o'toole is the expert on the stockpile issue and we have outlined what the challenges are in the stockpile. it doesn't cover everything. it's expensive to maintain because they have a short shelf life. it was a good idea at the time but constantly having to renew it is our biggest challenge. i think that most of us think there are other issues we can address. we certainly -- and certainly scientific issues that would give us a longer life in some of these areas, and i think on the production side, our ability to produce something faster and not being totally dependent on the stockpile is probably where your iom commission -- >> yesterday i had a meeting with some biodefense individuals and they were telling me that there is technologies they are looking at that would extend the life of -- the shelf life

through maybe a dry freeze, is that correct, and then also, they are retesting it, and some of it was designed to go two or three years has lasted as only as 15 years. they are constantly retesting it but how do we dispense it? how do we get it out? having it in a stock pile is okay but it doesn't do any good if it's housed in one place and doesn't get to where it's needed. >> one of our recommendations was to use existing community pharmacies. the original idea was using vas because they're spread across the country and do keep a certain supply. they are well located, the va hospital system, and warehouse system. the government has also contracted with i think fed ex to move pallets around the country. the reason for that is the military is not well situated to do that kind of thing. there has been extensive discussions in the government and a strategy for moving pallets of drugs very quickly using i think the contract was

with the fed ex system originally to move pallets around the country when there are outbreaks. >> miss o'toole? >> the big problem with the stockpile is traversing what's called the last mile. it's not about delivering the stockpile to the state public health departments. it's about getting it into the hands of people. as you can imagine, that dispensing function is very complex. washington state is going through pharmacies, that won't work in every state particularly rural states, although most americans live within reach of a pharmacy. advanced deployment is also being used in those very few states that can move very, very quickly to dispense such as new york city. one thing that would definitely help is more money for state health departments and local health departments to do drills on dispensing. these are invaluable but they are very time-consuming and

expensive. they simply don't have the money to do them. new york city does them, some of the big municipalities do them, but making those a more viable way to practice would i think make an appreciable difference. >> that's a great suggestion. mr. parker? >> everything you're asking really comes back to centralized leadership. we have been talking about this for 15 years or more. the last mile of dispensing medical counter measures, that is the hardest challenge. in fact, there was an executive order in about 2009, 2010, and i was just discussing this with one of my colleagues from public health from chicago yesterday. it seems that that work has just disappeared. but with centralized leadership, focused work on how to solve that last mile of actually dispensing the medical countermeasures, would go on. we need that, because it's one

thing to have a stockpile and it's one thing to be able to get it fed ex'ed to get it to an urban center but actually getting it into people's hands is a huge unsolved problem. >> thank you. i'm out of time. appreciate it. >> the chair recognizes ms. castor for five minutes. >> i'm going to scoot over. good morning. thank you to the panel for your terrific work on this important subject, and secretary, the folks at the university of miami were so appreciative and everyone across the country for your service. i know they miss you there. but it's great to see that you continue on in your service. i wanted to focus on hospital preparedness. during the ebola outbreak in africa, in 2014, we took a critical look at hospital preparedness and its important role in our nation's response to biological events.

at that time, in response to that, the president requested emergency supplemental funding for ebola. the congress responded. now with zika we are having to do that again. this doesn't seem to be the most efficient way to prepare for emergencies. i would like to ask a few questions about this, about what we can do to assist hospitals throughout the country in their response. you know, we had some that were very well prepared like emory university, what a terrific job they did because of their association with the cdc and nih, of course, was at the forefront in that ebola response. but some did not do quite as well. and there's no mystery that if that had been more serious, that a lot of hospitals across the country would have struggled. so what lessons do you think we

have learned from this, from the ebola outbreak in africa and the few cases that were -- that came to the u.s.? i would like to ask maybe ms. o'toole first. >> hospital preparedness is very important. i think between 2002 and 2008, it did improve. two reasons. first of all, disaster response drills are required by the hospital accrediting facility. again, for hospitals doing those kinds of drills is expensive and difficult. there also was a cdc/hhs flow of money to hospitals to help them with bioterrorism and pandemic flu preparedness. and what happened with that money is the hospitals started forming coalitions. in my city in 2001, baltimore, the mayor for the first time got all the ceos of the hospitals together in one room. this is a private sector competitive industry.

they don't necessarily cooperate, let alone collaborate, and those cdc funds made a real difference. these regional coalitions of hospitals were used to figuring out how they were going to share resources, share information, et cetera, et cetera. that funding has been cut in half since 2010. that makes a big difference. >> secretary, the panel's report mentions that disease-specific preparedness funding is the most inefficient and costly manner in which to fund preparedness. what are the alternatives to disease-specific programs, especially since many states have frayed their public health infrastructure? how can we respond better and give our hospitals in local

communities the tools they need? >> we have specific recommendations in this area, including steady stream of funding. we recommend that it be done through the accreditation system and through cms. in addition to that, we have recommended a tiered system. every hospital in this country cannot be prepared for every complex disease. so both the regional coordination but more importantly, identifying those hospitals that can have special rooms set aside. in florida, for example, all of us looked at particularly at the great public hospital in miami, whether we could build separate rooms with separate access to handle ebola patients, and in fact, went through an exercise to make that possible. a great public hospital that sees all sorts of diseases probably is the best place to do that as well as academic hospitals around the country. so creating a tiered system in which we know where we would

send patients once they're stabilized, obviously, that would have the capacity and the separation to be able to handle these diseases is certainly the way to go. we have some specific recommendations both on funding, on the accreditation process, but in particular, on creating a tiered system in this country that would give us coverage across the country as there are outbreaks. >> i think that's a very important recommendation. i would encourage the committee to act on it as soon as possible. thank you very much. >> recognize mr. cramer for five minutes. >> thank you, mr. chairman. thanks to the panelists. i want to focus on this incentive issue, congressman, that you raised.

i will admit up front that what i'm about to do is very dangerous. i'm going to think out loud for a little bit and admit you are not going to adequately inform and educate me in five minutes. so you have to come to my office and help me work through this idea. you have all done a great job, as has the panel, the blue ribbon panel, in scaring me to death. i'm adequately prepared to understand the threat and i think that's very important. but in our political world, of course, when it comes to the appropriations process, part of why i think you don't see congress acting or the government acting proactively is because we respond to the people we represent and they will blame us when we are not prepared and they will blame us when we spent money foolishly. and of course, we are talking about finding a way to invest in something that we hope is never needed. so that's our political dilemma. starting with congressman greenwood and others, maybe elaborate on the srf, the prb,

how we could help pharmaceuticals, the private sector, feel comfortable with the investment and the innovation and we have talked a fair bit about it, but if there's a way we can elaborate just a little more to help me better understand how we are going to do this. i might also emphasize, is there a way to put a cost benefit analysis on this? for example, miss castor was talking about emergency responding. that's a cost. that's a cost that could be avoided perhaps if we are better prepared. so has there been some work done in that arena that helps me assure my constituents that we are not just appropriating but that we are efficiently and effectively governing? >> well, thank you for admitting that we frightened you. obviously, our constituents, your constituents are not clamoring for this because it's a sleeper e. >> yes.

>> no one is thinking that this is going to happen. as i said earlier, the hearing you don't want to have is the one about why we were unprepared for the event that was so tragic. so i think to some extent, leadership involves informing your constituents and this hearing is an important part of that. that this threat is real. i calculate when it comes to bioterror, terrorists have the motive, they are trying to acquire the means, and despite our best efforts to deflect that, over time, the likelihood of that happening is one over one. it's going to happen. we have to be -- we have to believe that. we have to believe that the threat is real. in terms of what works, to be prepared, we talked about the contracting reform which is a minor thing but an important thing. congresswoman brooks is the leader on that.

we talked about the need for there to be sufficient funding to actually procure these mcms when they are developed. the secretary was completely correct when she said not to underestimate basic research at the nih. that's critical. but when it comes to just like in every other medical -- medicine that we develop, when it comes to actually developing the product and manufacturing the product, that's private sector is the only place where that is done. to invest money in that, the companies are willing to take the risk that maybe they will fail at the science, but the investors are not willing to take the risk that if they succeed, the federal government's not going to be prepared to reward them by procuring the product. so that's critical. you need enough money and money over time to be certain so there's a certainty that when you get to the end of the road and you get your product approved, that congress hasn't moved the money around and it's no longer there. >> secretary, i can see you may want to weigh in but one of the

things, i appreciate that your national defense analogy. i was thinking we spend billions of dollars on weapons we hope we never use, right? they do have the benefit of being a deterrent understandably, but it isn't dissimilar. we have to constantly make this case. thank you for that. and the centralized leadership as well, i'm still struggling with the whole vice president thing myself. the more you talk about it, the more sense it makes. so i appreciate that. is there anything else anybody would add to what the congressman just said about the investment? >> i would like to add a little bit and perhaps maybe just pull on the contracting itself as well. as we have heard, many of the companies in this space that are really contributing to biodefense and particularly those that are bringing the more innovative solutions are struggling themselves. and the typical far-based government contracting is really contrary to the biotechnology industry in and of itself. so i would think, i have actually been encouraged recently with some

pronouncements by dod to begin to start using some authorities they already have like other transaction authorities. i think also taking a look at what other things in just the basics of contracting that could make it more readily accessible that the innovative biotechnology companies would actually do business with us and the government is something to look at as well. >> thank you very much. if we could solve dod contracting in the context of this, that would be a bonus. that would be a cost benefit analysis right there. >> recognize mr. green of texas for five minutes. >> if we could solve the dod contracting we could probably have them audited. i want to welcome our panel here. the blue ribbon study panel in biodefense highlighted vulnerabilities in our ability to combat emerging and reemerging infectious diseases, particularly drug resistant infections which could cause

catastrophic loss of life and have already started to make even minor infections fatal. without greater investment in antibiotics we face a future that resembles the days before these miracle drugs were developed, one in which people died of common infections, many medical advances we take for granted become impossible including surgery, chemotherapy and organ transplantation. the challenges are representative of the challenge facing medical countermeasure product development. the market forces simply do not work and fail to foster the kind of pipeline we need. in 2012, this committee passed and congress passed the gain act and again, in this current session, in the 21st century cures act we worked to remove the financial and regulatory barriers to antibiotic drug development. secretary, can you elaborate on the study's recommendation for incentivizing the development of medical countermeasures for emerging infectious diseases with pandemic potential,

specifically please explain why there is such a need for the government to play a leadership role in this space. >> well, i think it's pretty straightforward that the only purchaser will be the government. there's not a private sector market for these particular biologicals. and therefore the government both has to incentivize the companies financially so that -- and i think the other thing to understand, jim can explain this better than i can, these are relatively small companies. often with a small number of products. we have known a lot about the biotech industry. they are fragile, i like to use the word fragile when you talk about them so that unless they know that they are going to be compensated and reimbursed for the cost of development, not

just the cost of production, but the cost of development, unless there are financial incentives, i don't know how we are going to move very quickly in this area. we have had some experience. congressman waxman and the orphan drug act, we had a lot of diseases in which there were very small markets at least initially, and the congress in its wisdom passed legislation that encouraged companies to invest in creating drugs and treatments for a very small part of the population. our problem here is we start small but we may need a production line that's huge at the end of the day. i don't know any other way to do it except with financial incentives. i just don't know, i think everything that we have learned, it's not just that i'm a capitalist, it's just from our

view at a public policy issue, when the market is going to be the government, there is no other way to get a very small number of industry people to invest unless they know there's going to be a market at the end of the day. >> jim, welcome back to your committee. so nice to see you. one of the proposals we have is the priority review voucher, prv. and the beauty of it, if you look at neglected tropical diseases, we knew that there's no financial pull, that these diseases that occur in places like africa, the countries are so poor they really can't afford to buy the product so investors just aren't putting their money there. when congress created the priority review voucher, it works beautifully, because what it does is it says to a company

if i can get a drug approved, even if i don't make enough return on my investment from the procurement of that product, another maybe large biopharmaceutical company will pay me and these things, there are only two or three of them sold but they have gone for $200 million, $300 million, $400 million. doesn't cost the taxpayer a penny. which simply gives them a shortened review period for some other product. that doesn't cost the taxpayers any money, either. they pay their fee, they get their product approved and sometimes they don't, but if they do, it gets approved a little faster, gets on the market and by the way, then it goes off patent sooner so it still doesn't have any cost to society. >> mr. chairman, i'm out of time but we have legislation in the senate and it would fast track because we recognize the government's going to be the one that has to do it because free

enterprise can't invest that money for something, but there is legislation and hopefully the senate will deal with cures and the complete package that our full committee approved overwhelmingly. thank you, mr. chairman. >> recognize the vice chair of the full committee. ms. blackburn. >> yeah, that woman from tennessee, tell you what. dr. parker, i am so happy to see an aggie on the panel. i have got aggies in my family and they always bring good common sense seasoned wisdom to the table. so happy to see you there. of course, mr. greenwood. how much we appreciate your insights on this and your dedication to the biotechnologies and the work that you have done there. just a couple of things that i want to touch base on. in talking with some of my research centers and in tennessee, we have such an

aggressive biotechnology group, and when i was in the state senate, i helped to formulate that group and so they have got a good underpinning and it doesn't matter if it's vanderbilt or st. jude's or whatever. they talk to me a good bit about the right balance between government and regulatory oversight and then the ability to incent. mr. greenwood, i'm so pleased that you just mentioned the priority review voucher for the mcms. i just think this is, when you look at these medical counter measures, that is just so important that we have that. and it doesn't matter if it is a material threat, if it is something like zika, we have to have a way to go about this, but i want to come to something that dr. o'toole mentioned, and then congressman greenwood, if you

will kind of answer to that. basically, her point was you move products to a point of scaleability and then if you need something, you are ready to move with it. and it can push that scaleability quickly. so let's go back to that voucher. mr. greenwood, if you will continue that conversation and kind of build that out, the importance of that, how you would address these for something that is a material threat, or like the zika virus which right now, there is not a vaccine and people are saying what are you going to do, why didn't you know this was a problem. the olympics are coming to brazil, people have been

vacationing for months in the zone that is affected, et cetera. so let's go back to the importance of having that priority review process for such -- for this type of occurrence. >> so there's great uncertainty for a company -- we have seen our companies and proudly jumping into this zika issue and trying to do some research on it very quickly to develop products. but i remember a company, member company of bio that was involved, looked like it was close to having something on ebola and they almost didn't want to talk about it because their stock was fluctuating like this. all of a sudden everybody would invest in that company and another company was doing something and people would pull out and it created unpredictability and volatility. it's an example of how the norms of economics don't work in this field. the priority review voucher takes away one of the uncertainties. that uncertainty is that it doesn't take away the uncertainty of can we make this product and will it be safe and will it be effective.

that's always a risk. i will tell you that doing that is harder than putting a man on the moon. most companies fail and most projects fail. so it's hugely risky to even bother trying. but if you do try, and you do succeed, the only reason your investors are giving you the leeway to go and do that is because they think that somehow, they will get a return, fair return on that investment. one way to do that is to have enough money in the reserve fund so that -- and have it there not just year by year but have it there multiple years so companies can know and investors can know if we succeed here, they will buy the product and we will get our investment back. but the priority voucher review is an entirely different way to do that. and because they have become so valuable, it is a huge driver, a huge incentive because if you can succeed, say right now where you had a priority review voucher for zika, companies

would know that if they could succeed, and if they not only would they have the great satisfaction of being able to spare people from this disease and god forbid, more children born with microencephaly, but they would have this voucher they could sell to the marketplace at a very nice return and use that money to invest in the next countermeasure. i think it's a no-brainer to me. i know there's some political questions about it but i don't think there should be because it costs the tax payers nothing. it costs society nothing and it provides nothing but benefit. thank you. >> thank you. yield back. >> i now recognize dr. burgess of texas for five minutes. >> thank you, mr. chairman. thanks to our panelists for being here today. i apologize for missing part of the hearing. we are having our budget season. mr. greenwood, you will remember what that is like. so never a dull moment around

here today. dr. o'toole, i just want to ask you because we have had several hearings over the past several years, just for context, my congressional career goes from sars now to zika, long enough for people back home to say term limits, but on the other hand, there may be some value in seeing some of this stuff over a continuum. but you reference in your testimony about what are called laboratory developed tests as zika comes into focus because okay, you got a chain reaction but only a few places can do it, it's pretty valuable, pretty accurate but it's hard to get, you got to go through a health department to get it. there's an igm antibody but it will cross-react with some other viruses so you are not really sure if your result is accurate. would you just speak to the

regulatory hurdles that you describe in your testimony and laboratory developed tests? because we in this committee have been studying that. there is a movement, as you may be aware, to move the regulation of laboratory developed tests from clia, the clinical lab improvement amendment which is administered through the center for medicare and medicaid services over into the food and drug administration and requires basically the licensing of laboratory developed tests just as if they were a new drug or device and we know the problems with the timeline of those things. so could you just speak to that briefly? >> yes. thank you for the question, congressman. first of all, the reason fda is so concerned about diagnostics is that they can have life or death consequences. we might want to think about different standards for diagnostics during public health emergencies. >> i'm going to interrupt you

for a minute. that is called clinical judgment and you and i understand that because we trained as physicians and that has to be part of the equation. it took me three years to get from the doctor at the fda a list of the problems that he was worried about with the development of laboratory developed tests. where are the outliers, where are the problems. to his credit, the last time he was in here a few months ago, he did produce a list of 20 tests that he said these may be problematic. but there are 11,000 laboratory developed tests out there and they are useful every day of the week in a clinician's office. so i'm sorry, but continue. >> so let me narrow the problem down to tests that we need for infectious disease and particularly during epidemics. okay? and we need a variety of different kinds of tests. as you know, you want a very

sensitive test when you have a low prevalence, but you don't want that same test when you are in the middle of an epidemic. so it gets tricky. however, here's the problem. it's very difficult to validate it gets tricky. however, here's the problem. it's very difficult to validate a new diagnostic against ebola or even zika if you don't have curated samples of those diseases. in my view, the government can put this in dod or hhs or fda. the government should develop a curated bank of diseases about which we are worried so that companies, especially these small fragile companies could come and test their diagnostics against them so that they could much more rapidly give fda usable data on how well their test works. that's one. secondly, i think just as fda has emergency use rules for medical counter measures, during public health emergencies, we ought to think about emergency

use schools for diagnostics which i think we can actually create rather rapidly and manufacture quickly during public health -- >> i would just tell you last year or 18 months ago during the peak of the ebola outbreak in september, i went to a hearing in the foreign affairs committee where we heard that the fda had actually put a clinical hold on a drug that was at that time in use in treating patients with ebola. i didn't want to hear about clinical holds. i wanted to hear about clinical trials. it really did seem like they were an obstacle faced with this worldwide scourge. i just need to ask a quick question and i appreciate your listing the recommendations of the blue ribbon task force. in my political training which granted, was a street level course, i was sort of taught that you only do three things, if you produce a list of 33 things, no one listens to you after the third one.

but i did read through your list and it is a good list. it's exhaustive. i hope it's not static because one of the things that we have worked on on the 21st century cures bill is electronic health records and if we do not address that fact in this -- in the recommendation that you have, i think that's actually going to stymie the ability for researchers and clinicians to communicate rapidly, to identify data, respect patient privacy rights but at the same time we need to have that ability for rapid learning within the system, whatever develops. >> as you know, there's been a lot of progress on electronic medical records in this country and continues to be and you are absolutely right, it's the touchstone piece. i should say that even though we have 33 recommendations, we have actually staggered them to identify those that we think

congress should do immediately that have more of a midterm value and a longer term strategy. so we very carefully laid out a strategy that would be workable for congress. >> thank you. >> and the federal agencies at the same time. these are not just recommendations for congress. >> i yield back. >> i now recognize mr. bilirakis for five minutes. >> thank you for allowing me to sit in on this very important hearing. as a former chairman of the emergency preparedness response communications subcommittee for homeland security, i recognize the need for the country to be proactive, not just reactive, to a host of biological threats both natural and man-made. i'm glad that i can continue to be involved in the energy and commerce committee.

i appreciate being given the opportunity to sit in on this subcommittee. secretary, earlier you mentioned that the state and local agencies are the first in line of defense against outbreaks and attacks. you also said that much of their funding through block grant programs has been weakened. what should we do to enable state and local entities to be prepared to respond to outbreaks or attacks? is there enough of a focus on medical surge capacity and mass prophylaxis capabilities? do we need flexibility in our grant programs? >> [ inaudible ]. -- the funding has gone down over a number of years. the cdc is pretty flexible but the states are really underfunded in terms of their

infrastructure as was pointed out by public health experts across the country in the states -- >> could you turn your microphone on, please? >> we have lost 50,000 public health employees in our states and local governments as well, and that has to be properly funded. the tradition has been to have almost a block grant that goes from cdc to the states. i believe in that tradition. i believe in the relationship between the cdc and states and local governments to build an infrastructure, because the cdc is not a line agency. when we are in an emergency, we think they are, but it's really the states and the local governments and their public health departments that are responsible for both the tracking, the identification for all of us in this country, and

we have to make sure that infrastructure, the states are under great fiscal pressure in this country and we have to make sure that infrastructure is beefed up, that stays in place. >> thank you. next question is for the panel. you all mentioned the lack of comprehensive biodefense strategy and the need for centralized leadership. what if any protocol is in place now to enable coordination between the agencies such as dhs, cdc, hhs and various state agencies when there is a disease outbreak, and what capability gaps exist in coordinating efforts between agencies, what makes coordination a challenge? we can start with the secretary. >> well, i think earlier, i talked about the fact that there were multiple agencies that were involved when we have an outbreak like this, and while hhs has very strong responsibilities and has the

scientific and public health expertise, homeland security, the defense department, there are all sorts of agencies across the board and we have made a very strong recommendation that the vice president be the ongoing coordinator. in this country. because the lead agency concept no longer works when you have various jurisdictions involved, and in particular, when you need to work with the private sector, with state and local governments. unlike fema, which basically can order people around, it's very difficult for one agency and i say this reluctantly, because as a former hhs secretary, i wanted to own the world, but when you don't have proper jurisdiction, when you don't have the leverage, then you have to elevate it, elevate both the responsibility and we are much more sophisticated about the role the private sector, the development of diagnostics and that this has to all be part of

our overall strategy in this country. >> i just want to add to that, the need to be able to elevate it. that centralized leadership not only is needed at the federal level and to try to close these gaps between each individual department and agency, because they want to exercise their own authorities, but there are gaps between them. but this will transcend all the way down to the state, local, private sector level. you mentioned surge medical at the local level. it's not just public health. it will be more logistics. emergency management and other d disciplines will be necessary for surge medical dispensing of antibiotics. it's logistics. public health doesn't do logistics.

>> thank you. i will yield back. it transcends, the federal, state, local and private sector levels to close these gaps between the multiple disciplines and agencies that have to

contribute to bio defense. >> thank you, mr. chairman. >> thank you very much, thank you all for being here today. dr. o'toole, during the ebola jaut break, there were witnesses in our system that we're witnessing again with zika, detection, diagnostics. overall, how would improved surveillance of animal outbreaks help us better prepare for epidemics. >> well, the majority of emerging infectious diseases come from animals. there are diseases that affect both humans and animals. so we definitely need to do a better job looking at those hot spots where we are likely to see spillover from one species to humans. most of our surveillance is in temperate zones. we have high speed genomics that could give us a handle on what diseases might be able to spillover. secondly, we ought to fund much more rigorously the usd a's existing program. modern methods put animals together, creating our own industrial hot spots for

spillover. and we've seen that with flu and the loss of turkeys and chickens in the past years. we spent literally billions on surveillance in the past 15 years. we need to figure out what's really made the difference. part of that again, we sound like broken records, funding state health departments. because that's where, you know, the rubber meets the road. but we have to help state health departments do a better job. diagnostics, again, critical, critical, critical, critical. clinical disease is very vague. if you don't have been a diagnostics to say this is zika and thens denghi, you're going to have a hard time figuring out what's gong on at the beginning and middle of an epidemic. particular surveillance programs, they don't work unless you know what they're going to do and who's going to use that

information. >> the next question was going to be, are we doing a good job of integrating human and animal environmental health. and i think you answered that. secretary, how can we improve those three components to develop a more comprehensive strategy to ensure we're prepared for whatever is next? >> our major recommendation is we put this in the office of the vice president, that we really need a national leader with the clout to integrate all these pieces and to help us. to help us think through a strategy. the strategy, having the metrics for it, keeping people accountable, we've all recommended that we elevate that

to the office of the vice president. >> i appreciate that. lots of rules about zika. the coaches, the family members that will all go down. bubl that we will be ready. obviously the brazilians will have to do things. this is an international effort, but do you believe we're going to be ready to be able to defend our folks, or have the biodefense efforts ready to depend our athletes and spectators and coaches and family members who go to the olympics this year? >> well, i understand the deep concern that zika has raised. whenever children are affected, grown-ups get deeply, deeply worried. that's what's happening here. i will say that there are dozens of very dangerous mosquito and even tick-born diseases that have been with us for mill len yeah.

and you can to some extent protect yourself from mosquito bites by using deet and dressing well and sleeping in places with screens and so forth. that's not a perfect protection. it's not a zero risk. >> we have to wait and see more information about what is going on. we have known there's been more or less an epidemic of denghi and chicken gungha. and denghi is a serious disease. we have to wait in there's more information about zika. i wush we had a vaccine. i think if i were a young woman who is pregnant or getting pregnant, i would think twice about going to south america right now.

but i think for most people, there are ways to at least mitigate the risk. >> would you indulge me 30 seconds on the zika question? i want to point out, aside from medical countermeasures on zika. there's a whole field of looking at how to bioengineer mosquitos, which we already know how to do. they're all males, they don't bite, and they mate with the females and the progeny don't survive. it's a fascinating new technology that may be part of the solution to this problem. >> i know we have votes in a few minutes. but if you have one quick follow-up question. >> thank you, mr. chairman. to mr. greenwood with respect to the priority review voucher program. can you share with us existing prv programs for rare pediatric

disease or neglected tropical diseases, increasing the biotech investments in this area. can you give us some examples where you've seen that already happen? >> i probably have that in my notes. i would just say -- >> and if you would like to submit it for the record, that would be fine. >> i will submit that for the record. suffice it to say that it is works, it has created both in the area of pediatrics and the area of neglected tropical diseases, it has generated a tremendous amount of interest and investment, and it is working perfectly well. this is as congress intended. i have no doubts that it would work well in this field as well. >> do you believe that we added dhs's material threats to the fda's prv program, it would spur additional development of the medical countermeasures? >> i think that's precisely what needs to be done. i have no doubt whatsoever that it will be successful in inspiring investment in this very dangerous field.

>> there are too many agencies and too many people involved. and when too many people are in charge, no one is in charge. and i get that. >> and too many committees of jurisdiction. >> and i'm not -- i don't quite share your enthusiasm for putting this into the executive branch. perhaps it should be a speaker's position, but nevertheless, i will just tell you, i was down at the border, the little rio grande border last weekend and realize you've got cdc map that shows mexico and central america being purple with zika. in my states, the other side of a relatively narrow river. it just seems to me we don't pay enough attention to border control. i know you can't stop mosquitos at the border, but really, the issue is stopping people who are

infected or potentially infected. and right now, we are undergoing another surge of unaccompanied minors and family units. and to the best of my ability to detect, we're not looking. and that is a point of great concern to me. so all of the other things we talked about are extremely important, but let us not forget border control, because that's an issue as well. >> well, i'll leave that to your comments, but i would say that we also have to beef up global health. that is pan american health organization. this is part of the world health organization. we can't stop mosquitos from crossing borders. whether it's people or they're just flying across. beefing up our own infrastructure, one of the

things we learned with ebola is the world health organization doesn't have the kind of authorities it needs. it doesn't have the resources they need. and so it's not just a state and local issue or a federal issue, it's also an international issue. and i think your point about border security is also. but i would put it in the context of international health security and looking at the agencies that we have now, the international agencies that we have now. and we know that they're weak, we learned that during ebola and previously. and this committee also might have a hearing because there have been recent reports on the international health organizations to take a look at those relationships as well. >> thank you. >> i would an answer to each of you. if you know countries who model programs of the very thing you're describing, we would love to know about that.

any of us know any offhand or would you like to get back to us on that? >> my only comment is if we don't have it, i would be sr. surprised if anyone else in the world had it. >> to be fair, there are centralized health systems in smaller places that may be more integrated. but i think that we have dpircht levels of government, different levels of responsibility. we need to put -- we can't use their models. we'll have to put our own system together. >> thank you. >> another question, just hope you can get information to us for the record. based upon -- given the recent geo report on the failings of bio watch programs, including the lack of valid performance data, should we continue to fund it? >> i'm sorry, would you repeat the question. >> should the federal government repeat the biowatch program given the report on its failings

and problems including the lack of valid performance data? >> i think we probably will get back to you on the record with that. >> can you answer that? >> i'm a long-time critic of bio watch, but i think you should continue to fund the current program for a defined period of time until we have a strategy for what we're going to go do next. i think the notion that bio watch, or even the next gen bio watch, a series of environmental sensors can protect the country is wrong headed. the technology just isn't good enough. the cost effect in this ratio is just not advantageous. we need a new generation of technology. it's not there yet. again, diagnostics would make a big difference. you do nies these sorts of sensors to protect high-risk targets and national security events and so forth. the problem with biowatch right now is that it is not characterized as gao points out very graphically and i think

accurately, we don't know that it works. it's not clear that it doesn't work. it has a very limited range of bugs that it looks for. it would be very expensive. >> i want the committee to -- >> can i just say something? thank you. first of all, with all due respect to my friend from texas, i don't think any kind of border control, even building a wall is going to stop these vector-born diseases from coming over. i know that's not what you mean. but what it does really high ligt is that we are an international community. it's not just the mosquitos coming. we even had ebola cases come here because of international travel. it is critical that we take this report seriously and work hard as a committee.

i just want to commend you again for calling this hearing. i know you're planning to have a classified briefing when we come back from the february recess. i think that's a good other step. and i would just offer my input and of the minority staff and members to help come up with a robust hearing schedule for the rest of the year. i think if there's nothing else we do, spend time on this report and recommendations, trying to get our arms around it and get that sense of urgency to our respective leaderships and it will have been successful. and i want to thank everybody again from the commission for doing this deep dive. this really is important. on march 2nd, we will have a hearing on the zika virus where many of these issues will come up. we'll take a deep dive as well as what my friend said about getting into classified briefing and some of the bio defense issues critically important and shoulda