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."
In theory, Project Bioshield will stimulate "a biodefense industry that we can go back to again and again for new products as the biothreat evolves," the staffer says, noting that eventually "hundreds of products" might be developed, creating a "robust industry."
Under Bioshield, the Department of Health and Human Services (HHS), in consultation with the Department of Homeland Security, would promise to buy and stockpile new therapeutic drugs, vaccines, and diagnostic agents that meet its criteria. Bioshield also would speed up procurement by allowing HHS to purchase drugs before they gain approval from the Food and Drug Administration.
Among the terrorist threats currently mentioned are the use of anthrax, smallpox, plague, and Ebola, as well as radiation sickness from a "dirty bomb" - not a nuclear bomb, but a conventional explosive device used to disperse radioactive material.
While it's tough to quantify how real the threat is, it's true that the former Soviet Union and other nations have produced pathogens that were turned into weapons, says Julie Fischer, who follows medical emergency preparedness and biological security issues at the Henry L. Stimson Center, an independent public policy institute in Washington. "They exist out there. Whether or not they'll be used in the United States in the near future, that's a matter of guessing at the risk."
Unconvinced that the Bioshield bill has gone far enough, Sens. Joseph Lieberman (D) of Connecticut and Orrin Hatch (R) of Utah are expected to file a Bioshield II bill before the end of this session. Among its provisions would be stronger liability protection for drugmakers - which might be a necessary incentive for Big Pharma.
Small biotech firms don't care as much about liability because they aren't making any money yet anyway, Rapoport says. But the big companies have a lot to lose if their drugs are later shown to be harmful or ineffective. "They don't want to jeopardize their [other products] experimenting in this crazy area unless the government says, 'We're going to help you out.' "
Companies also want clear assurances that their patent and intellectual property rights won't be compromised. After the anthrax letters scare, Tommy Thompson, the HHS secretary, demanded that Bayer lower its prices on Cipro, an anthrax drug, or risk losing its patent - sending a chilling signal to drugmakers. "That's an ongoing debate and a much larger issue," Dr. Fischer says.
This first batch of Bioshield money should be spent for stockpiling existing vaccines or those that are well along in the pipeline, says Una Ryan, CEO of AVANT Immunotherapeutics Inc., a biotech firm in Needham, Mass. "I think that's what the concept is, and I think it's a good one."
While calling Bioshield "a wonderful start," Dr. Ryan says the program needs more committed funds for a longer period. And it's important that any new legislation not discourage development of drugs with dual uses that might have commercial potential as well, says Ryan, a member of the board of directors of the Biotechnology Industry Organization.
The effort to bring the drug and biotech industries into the process augments the basic research on bioterrorism already being done at the National Institutes of Health. "The NIH has a spectacular record on research, but it doesn't have a good track record in bringing products to market," says Jerome Hauer, director of the Response to Emergencies and Disasters Institute at George Washington University and a former public health emergency preparedness official at HHS. "That's got to be done in the private sector."
At the same time, Dr. Hauer and others point out that much more than Project Bioshield will be needed. "This doesn't fix the bio-defense problem," he says. For example, the country is unprepared for a sudden surge of hospital patients. "If we had 10,000 patients from a biological or nuclear or radiation attack in any city, such as New York or Los Angeles, it would overwhelm the ability of the healthcare system to deal with it.
"We have to be focused on more than just biodefense and terrorism," he says, noting that the country also needs a focused approach to nonterrorist threats, such as a flu epidemic or SARS outbreak.
Bioshield will provide "some protection against what are arguably the most plausible forms of terrorist action, which would be release of known pathogens," says John Steinbruner, director of the Center for International and Security Studies at the University of Maryland. But it fails to take into account the big picture, he says.
"The whole world, ourselves included, is at the very early stages of understanding the nature and magnitude of this problem and designing sensible responses that themselves do more good than harm," Mr. Steinbruner says. Of urgent concern is the inadvertent development of even more dangerous pathogens, which demands a much more active oversight process. "The one thing we most have to worry about are people going off in a dark corner somewhere and doing God knows what and not telling anybody about it," he says. The rules should demand "transparency and independent oversight," he says. "And we should never ever allow any of it to be done under national-security secrecy rules."
The proof will be in what results. If all the US ends up with is $6 billion worth of anthrax vaccine, Fischer says, "we will not really have achieved very much."
• The most likely bioterrorism threats are anthrax, smallpox, and plague.
• The US maintains a repository of supplies for bioterrorism emergencies. In 2002, it was renamed the Strategic National Stockpile and put under the jurisdiction of the Department of Homeland Security. It includes antibiotics, chemical antidotes, life-support medications, respirators and other breathing maintenance supplies, and surgical items.
• Nearly a dozen nations are suspected of having the capability to produce biological weapons, including China, Iran, Israel, Libya, North Korea, and Sudan. The US and Russia signed a treaty to destroy their arsenals. Iraq's bioweapons have not been found.
SOURCES: Centers for Disease Control and Prevention, Carnegie Endowment for International Peace