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Drug Companies Gain from BioShield II

Encouraging private industry to invest in the creation of drugs and vaccines to combat biological and chemical terrorism has been a difficult process. Without government subsidies, the drug companies argue, they cannot afford to spend millions in research and manufacturing. Further, unless there is a large-scale attack to drive up demand for the drugs, drug companies likely won’t see a profit.

Recognizing the problem, Congress passed the BioShield Act of 2004. That legislation amended the Public Health Service Act to authorize the Department of Health and Human Services (HHS) to “conduct and support research and development activities regarding qualified countermeasures.”

Included in the definition of qualified countermeasure is any “drug, biological product, or device to treat, identify, or prevent harm from any biological, chemical, radiological, or nuclear agent that may cause a public health emergency affecting national security.”

BioShield also provided for grants to modernize existing biomedical and behavioral research facilities and construct new ones. It gave authority to the federal government to procure critical drugs using specially designated funds. In addition, BioShield amended the Federal Food, Drug, and Cosmetic Act (FFDCA) to allow specific drugs to be introduced to the public prior to FDA approval, provided the Homeland Security Secretary determined that a national emergency merited the use of such drugs.

Although BioShield was touted as a boon to drug companies, many in the industry say that it did not go far enough to encourage the drug research and production process. As a result, the Biodefense and Pandemic Vaccine and Drug Development Act of 2005, nicknamed BioShield II, was introduced by Senator Richard Burr (R-NC) to offer further incentives to drug companies.

The legislation, expected to come before the full Senate for a vote in the near future, further amends the Public Health Service Act to establish the Biomedical Advanced Research and Development Agency (BARDA). BARDA would reside within HHS and would be responsible for coordinating and overseeing “activities that support and accelerate advanced research and development of qualified countermeasures to exposure to hazardous agents or infectious diseases or qualified pandemic or epidemic products.”

In addition, BARDA would receive budgetary authority through HHS to award contracts, grants, and cooperative agreements, or to support other activities to promote innovation in advanced research and development of drugs.

BioShield II would also limit company liability for drugs negatively affecting the public, unless “an administrative law judge finds by clear and convincing evidence that a violation of the FFDCA occurred and that such violation was a result of willful misconduct.” Many in the pharmaceutical industry, including the Pharmaceutical Researchers and Manufacturers of America, applaud this provision. A spokesperson for the organization said drug manufacturers must be protected in this manner; otherwise, the threat from lawsuits would further discourage drug production.

But critics of the provision, like the National Vaccine Information Center (NVIC), argue that liability protection will prohibit citizens from having adequate recourse if a defect is found in a drug. These critics also maintain that the provision extends liability protection to drugs that are not related to homeland security. In a letter to the Subcommittee on Bioterrorism and Public Health Preparedness, NVIC President Barbara Loe Fisher wrote, “While the 2004 Project BioShield Act primarily addressed bioterror pathogens and countermeasures, S.1873 [BioShield II] now also includes blanket liability protections for those who make and administer vaccines used during ‘natural outbreaks’ of disease and ‘pandemics.’” Fisher says this expansion of liability protection for drug companies will open the door for abuse.

Another criticism of the bill stems from a provision that would shield BARDA from requirements put forth by the Freedom of Information Act. The act prohibits the HHS Secretary and the director of BARDA from “requiring the disclosure of confidential commercial or proprietary information.” In addition, it exempts BARDA meetings from federal antitrust laws.

Representatives from the drug industry say this is necessary to protect intellectual property and encourage cooperation among drug manufacturers. However, Sidney Wolfe, director of Public Citizen's Health Research Group, says this could have dire consequences for the public because these drugs would not be subject to the same type of review as other FDA-approved drugs.

Fisher says that this will mean “there will be no transparency into BARDA deliberations” and that “its duties, activities, working groups, and advisory boards also will not be subject to ... judicial review as they should be.”