New buffer for bioterror's tempest

In coming years, the likes of giant defense contractors Boeing, Northrop Grumman, and Lockheed Martin may have to make room for tiny start-ups and big drug companies that make antidotes for bugs instead of bombs.

Project Bioshield, a bill passed by Congress and expected to be signed shortly by President Bush, authorizes $5.6 billion over the next decade to induce drug and biotech firms to develop new vaccines, drugs, and diagnostic tools to counter biological attacks on the United States.

Determining the right amount to spend on biodefense isn't easy when the size and likelihood of the threat are so unclear. So far, in the only known bioattack on the United States since Sept. 11, five people died from anthrax-laced letter attacks delivered in October 2001. But Congress seems to think the money is well spent. The Senate passed the Bioshield measure 99-0 in May, following the lopsided approval of a similar bill in the House last year.

"There's great excitement that we're on the verge of a new industry in America called the biodefense industry," says Frank Rapoport, a partner at McKenna Long & Aldridge, a Washington, D.C., law firm that advises drug and biotech companies on how to obtain government contracts.

Mr. Rapoport, who had a hand in drafting the Bioshield legislation, says he can foresee a future in which biodefense amounts to 10 percent of all US defense spending - about $40 billion annually in current terms.

In 2000, the Defense Science Board identified 57 countermeasures needed to protect the US against known biological threats and said that only one was available. Four years later, there are only two: the anthrax and smallpox vaccines. The terrorist attacks of Sept. 11, 2001, and the anthrax-laced letters sent to Congress and other locations the following month, have greatly heightened government interest in boosting the nation's biological defenses. In May, the US attorney general and FBI director announced new intelligence indicating that Al Qaeda intended to attack the US in the coming months, though the type of attack was unknown.

Drug companies traditionally have shied away from government contract work. Developing a new drug often takes a decade or more and requires a large investment; companies want to know that a profitable market will exist down the road. Biodefense drugs would be needed only during what is hoped would be rare national emergencies.

"The only way to get [the drug companies'] attention is to have a customer, and the customer has to be the US government because you and I don't go to the CVS to buy Ebola [virus] vaccine," Mr. Rapoport says. "Before Bioshield, there was no signal from the administration that if you build it, we will come."

The government had to put the money on the table before drug companies would do the research and take the risk, says a US Senate staffer familiar with the Bioshield bill. "The government's going to say, 'Here's what we want, and here's what we're willing to pay for it,' which is essential data the companies need to judge whether they are going to create a product."

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