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May 1, 2001

Good afternoon, Mr. Chairman, and Members of the Subcommittee. I am Dr. James M. Hughes, Director, National Center for Infectious Diseases, Centers for Disease Control and Prevention (CDC). I am accompanied by Steven D. Bice, Director of the National Pharmaceutical Stockpile program, in CDC's National Center for Environmental Health. I appreciate the opportunity to update you on the activities of CDC's National Pharmaceutical Stockpile program, one component of CDC's overall public health response to the threat of bioterrorism. Significant progress in the development of the stockpile has been made since a hearing on this subject approximately one year ago.

As the Nation's disease prevention and control agency, it is CDC's responsibility on behalf of the Department of Health and Human Services (DHHS) to provide national leadership in the public health and medical communities in a concerted effort to detect, diagnose, respond to, and prevent illnesses, including those that occur as a result of bioterrorism or any other deliberate attempt to harm our citizens. This task is an integral part of CDC's overall mission to monitor the health of the U.S. population. This mission unfolds every day in various forms, such as disease outbreak response, concern for worker safety, and critical work in global health. CDC, working with other partners inside and outside of DHHS, also has significant experience in responding to explosions and chemical related events and emergencies.

In 1998, CDC issued Preventing Emerging Infectious Diseases: A Strategy for the 21st Century, which describes CDC's plan for combating today's emerging diseases and preventing those of tomorrow. It focuses on four goals, each of which has direct relevance to preparedness for bioterrorism: disease surveillance and outbreak response; applied research to develop diagnostic tests, drugs, vaccines, and surveillance tools; infrastructure and training; and disease prevention and control. This plan emphasizes the need to be prepared for the unexpected -- whether it be a naturally occurring influenza pandemic or the deliberate release of anthrax by a terrorist. Copies of this CDC plan have been provided previously to the Subcommittee.

CDC is continuing to build on these efforts. An example of this is a public health strategy that CDC is developing with its partners to define the specific activities that will need to be conducted over the next several years to ensure that the country is prepared to respond to any threat or actual act of bioterrorism.

Unlike an explosion or a tornado, in a biological event, it is unlikely that a single localized place or cluster of people will be identified for traditional first responder activity. The initial responders to such a biological attack will include hospital staff, members of the outpatient medical community, and a wide range of response personnel in the public health system, in conjunction with county and city health officers.

Increased vigilance and preparedness for unexplained illnesses and injuries are an essential part of the public health effort to protect the American people against bioterrorism. Toward this end, CDC, working in collaboration with State and local health departments, many other public health partners, and other Federal agencies, has begun the effort to upgrade public health capabilities locally and nationally to respond to biological and chemical terrorism. With these partners, CDC has moved aggressively in multiple areas, including model preparedness planning, developing national biological and chemical agent laboratory diagnostic capacity, promoting laboratory security to prevent the misuse of dangerous biological or chemical agents, strengthening surveillance and epidemiologic investigation capacity, and enhancing communications systems, particularly at the local level. Another integral component of public health preparedness has been the development of a National Pharmaceutical Stockpile (NPS), which can be mobilized in response to an episode caused by a biological or chemical agent. Today I will be discussing CDC's ongoing development and implementation of the pharmaceutical stockpile, but it should be stressed that for its optimal utilization nationally, it should be developed in concert with the other five areas of the public health infrastructure just mentioned.

The role of the CDC's NPS program is to maintain a national repository of life-saving pharmaceuticals and medical materiel that can be delivered to the site of a biological or chemical terrorism event in order to reduce morbidity and mortality in a civilian population. The NPS is not considered to be a first response tool, but rather a backup and means of support to state and local first responders and public health officials. Key elements of the NPS program include procurement, logistics/transportation, readiness/response, training, operational research/evaluation, and quality assurance/monitoring. The CDC has developed this program in collaboration with federal and private sector partners and with input from the states.

Components of the Stockpile

The NPS program consists of a two-tier response. The first tier consists of 12-hour push packages, which are pre-assembled arrays of pharmaceuticals and medical supplies that can be delivered to the scene of a terrorism event within 12 hours of the federal decision to deploy the assets. The push packages will allow for the treatment or prophylaxis of disease caused by a variety of threat agents. There are now eight identical push packages which will be stored at strategic locations across the United States.

In the past year, special air cargo containers were designed and purchased by the NPS program. Load plans were developed for each air cargo container, and most of the push packages have been loaded into these air cargo containers. Load plans have also been developed for all common types of civilian and military aircraft.

Secure, environmentally controlled warehouse space meeting all applicable Food and Drug Administration (FDA) and Drug Enforcement Administration regulations has been identified, with contracts negotiated. These storage sites are now in use, have been secured, and have limited access. The parent companies for these storage sites also partner with the NPS program to assist in stock rotation and replacement. Inventory is flagged prior to expiration so it can be resold and replaced with fresh stock. At present, nearly all of the eight push packages have been moved to their permanent locations, and the first round of expiring inventory has been successfully rotated.

The second tier is the Vendor-Managed Inventory (VMI), which will arrive at the scene 24 to 36 hours after activation. The VMI packages consist of additional pharmaceuticals and medical supplies and will be sent if more supplies are needed. They can be tailored to a specific threat agent which should be identified within that time frame using the resources of the Laboratory Response Network for Bioterrorism, a collaborative effort of CDC, the Association of Public Health Laboratories, and other federal and state public health partners. CDC has put in place two of the VMI contracts and is in final negotiations with pharmaceutical companies to provide the remainder of these services to the NPS program.

Contents of the Stockpile

CDC is continuing its ongoing deliberative process to guide purchasing decisions for the NPS program. In 1999, CDC convened two working groups of experts including representatives from the intelligence community, DHHS, academic experts, and state and local health authorities to provide extensive input to the initial formulary. This panel will be reconvened this summer. A medical review panel has been established, and is consulted on all formulary decisions and equipment selections. CDC also continues to work with the intelligence community and various national security agencies to stay abreast of any potential emerging bioterroism threat agents.

Antibiotics have been purchased for the treatment and prophylaxis of anthrax, plague, and tularemia. The 12-hour push packages are in place for plague, tularemia, and chemical agents based on the predicted affected population for these agents as outlined in the DHHS Operating Plan for Anti-Bioterrorism Initiative, Fiscal Year 1999. Additional pharmaceuticals, supplies, and equipment are being purchased to meet the readiness capability levels required for other agents.

CDC has begun the additional research, regulatory, and production steps required to meet the needs for smallpox and botulism preparedness. CDC has entered into a contract with Acambis (formerly OraVax) to produce new generation smallpox vaccine to supplement the existing stockpile of vaccine. Studies are also underway, in collaboration with the National Institutes of Health, to determine if the existing vaccine will retain its effectiveness if it is diluted, which would allow for more vaccinations from the existing quantity of vaccine. For botulism, CDC is working with the Department of Defense on development of a botulinum antitoxin.

Deployment Process for the Stockpile

The decision to deploy will be based on the best epidemiological, laboratory, and public health information regarding the threat. A potential scenario for a bioterrorist event would be that CDC, at the request of a state health department, would begin investigating an unusual pattern of illness or injury and conclude that the outbreak might be the result of bioterrorism. When a biological or chemical terrorist incident is suspected, CDC will begin or intensify surveillance activities, laboratory confirmation procedures, notification of appropriate Federal agencies, and provision of pertinent technical support. If the stockpile is needed, 12-hour push packages will be deployed initially, followed by specific vendor managed inventory packages as warranted. A Technical Advisory Response Unit (TARU) will be deployed wherever stockpile material is sent. The TARU consists of pharmacists, public health experts, and emergency responders. These advisors are prepared to help states and cities with transfer of the push packages to the designated official and with other issues surrounding the NPS. They will also be in constant contact with the NPS operations center.

CDC has negotiated contracts with commercial cargo carriers to provide for the rapid transport of the stockpile. These carriers will provide transportation at a moment's notice, via ground or air, to any U.S. location.

Stockpile Management

The CDC provides guidance, oversight, and evaluation of all aspects of the NPS. All staff members bring professional backgrounds and technical expertise to a variety of issues related to the management of the NPS.

CDC has chosen the Department of Veterans Affairs National Acquisition Center (VA NAC) as its acquisition partner for the NPS, and this partnership has proved to be beneficial and has resulted in cost savings through negotiation of favorable prices and contracts. VA NAC has dedicated a staff person as the single point of contact committed to NPS matters. VA NAC and CDC have worked closely to acquire all the pharmaceuticals and medical supplies that comprise the stockpile. VA NAC was instrumental in negotiating contracts for storage locations and transport of the stockpile. VA NAC is also aiding in negotiation of VMI contracts.

An electronic inventory management system has recently been purchased and will allow for efficient and accurate inventory tracking, ordering and receipt of all products, status of transactions, and scheduled rotation of stock to maintain current expiration dating. CDC expects this system to be fully implemented by this summer, and it will be available to all requiring access to this information. The new electronic system replaces the current labor-intensive system.

The CDC has instituted a rigorous quality assurance and quality control program in order to ensure the integrity of the NPS. Site visits are made quarterly to each storage location. In addition to scheduled visits, unannounced visits are also made to each location. CDC staff use a standardized protocol to cover all aspects of NPS program responsibility, including storage, security, and deployment procedures. Partners are held accountable to correct any deficiencies noted at the time of inspection. To date, no deficiencies have been discovered.

Participation in exercises at local, state, and national levels has also occurred in the past year. The NPS program has had representation at numerous tabletop exercises and has participated in large-scale national exercises such as Launch Relief 2000 and TOPOFF. These exercises were conducted to test the responsiveness of the federal systems to a terrorist event. Further participation is scheduled throughout the coming year.

CDC's NPS program continues to work with other key federal partners involved with issues surrounding management and deployment of the stockpile. These agencies include the Federal Bureau of Investigation (FBI), FDA, and the Federal Emergency Management Agency (FEMA). CDC's staff efforts have increased in order to provide technical assistance to the states and cities receiving the NPS.

An intense effort is underway to fully inform state and local responders about the specifics of the stockpile. All FEMA regions have been briefed on the NPS. In addition, two face-to-face training sessions were held at CDC with invitees from both public health planning and emergency management units from all 50 states. Further sessions will be conducted in the future. CDC also has recently begun helping states plan for dispensing medications in the stockpile.

Comments on GAO Report

I would like to comment on the U.S. General Accounting Office report released today, Combating Terrorism: Accountability Over Medical Supplies Needs Further Improvement. CDC reviewed a draft of the report, which recognized the substantial effort that CDC and other DHHS agencies have made to improve the management of their pharmaceutical stockpiles since GAO's October 1999 report on the subject. CDC appreciates the ongoing contributions of GAO to assure the NPS functions to the maximal benefit of the American people.

In its draft report, GAO recommended executing written agreements (including standard operating procedures and finalized contractual agreements) with all NPS program partners covering storage, management, stock rotation, and transportation. CDC agrees with the need to have final written agreements. Currently, CDC has final written agreements/contracts with principal commercial partners for storage and rotation, as well as interim SOPs and contractual agreements with transportation partners. It is also of note that the NPS program used existing contractual agreements that were in place between the VA and commercial partners before purchasing or placing assets at storage locations.

CDC selected its program partners and storage location sites based on their known good business practices, security measures, and procedural methods associated with handling large pharmaceutical and medical materiel inventories. These strengths enable the NPS program to ensure the integrity of the inventory and the ability of the program to maintain readiness. While some final contractual agreements are in place, others are undergoing legal evaluation. CDC will finalize all outstanding SOPs; once completed, the SOPs and written contractual agreements will serve to codify procedures already in place.

In its second recommendation to CDC, GAO recommended that CDC issue written guidance on security (i.e., access to storage sites for rotation purposes) to two private warehouse storage facilities. GAO expressed concern that, without adequate SOPs or a final written contractual agreement in place to guide access and security control activities, there is increased risk of unauthorized access to NPS inventory, and that inventory may not be rotated in a consistent and timely manner.

CDC agrees that written guidance is necessary. In regard to access and rotation, each NPS program storage partner has procedures in place to ensure admittance of only authorized individuals to their facilities. CDC is in the process of updating the existing SOP to ensure it includes information regarding controlled access to NPS inventory (particularly at private warehouses) and key responsibilities and guidelines for stock rotation. The first quantity of stock has been successfully rotated prior to expiration.

CDC's NPS program uses a stringent regimen of regularly scheduled quality assurance/quality control inventory checks and unannounced visits in order to assure that NPS inventory is accounted for and secure.

In its third recommendation to CDC, GAO recommended installation of proper fencing as a theft deterrent at selected storage sites prior to placement of inventory. The draft report identified inventory as having been at risk for pilferage and theft for several months due to lack of fencing.

Fencing was installed to serve as a demarcation of NPS assets within a larger warehouse, and it has provided an additional level of security at nominal expense. CDC believes there has been no risk of theft of materiel during the initial months of 12-hour push package placement, as the commercial facilities chosen to store the push packages are bonded, FDA-licensed, or DEA-approved warehouses that operate under strict security controls. All aspects of the existing operations are designed to ensure the environmental safety and physical integrity of pharmaceuticals and eliminate all risks of loss/theft.

The regularly scheduled quality assurance/quality control monitoring of NPS inventory, unannounced visits to each location, and other redundancies built into the program further contribute to elimination of the risk of loss/theft.

GAO recognized the extensive effort that went into the development of the NPS "rotation in place" concept, which allows the program to prevent unnecessary waste due to expiring materiel. However, we would like to clarify the timetable associated with this concept. The wholesale distributor requires six months of shelf life left on a product in order to sell it to another customer and replenish the NPS stock with fresh product. However, the NPS program begins "flagging" the inventory one year before it expires to ensure adequate resale time for the wholesale distributor. The majority of the inventory totaling $4.3 million identified in the GAO draft report as being "at risk" has already been rotated. CDC has until June 2001 to complete rotation of that stock.

The GAO draft report also noted that CDC had followed its internal guidelines for establishing the composition and stock levels of medical supplies. Additionally, no expired items were found in NPS inventory, nor were there any unresolved discrepancies between NPS inventory and management system data.

CDC was tasked with creating the NPS in fiscal year 1999, and much has been achieved since then. The NPS program involves direct coordination and management by CDC staff; ongoing monitoring, quality assurance, and evaluation; and the formation of partnerships with ongoing collaboration and communication.

Through its NPS program, CDC will continue to ensure the availability and rapid deployment of life saving pharmaceuticals and medical materiel to the nation in the event of a biological or chemical terrorism incident. Current priorities for the remainder of 2001 include finalizing contractual arrangements for storage and transportation of 12-hour push packages and VMI, continuing procurement of medical materiel to meet target levels for all threat agents, and finalizing standard operating procedures and memoranda of understanding for storage, management and transport of the 12-hour push packages and VMI.

Thank you, Mr. Chairman and members of the Subcommittee, for the opportunity to testify before you today about CDC's National Pharmaceutical Stockpile Program. I will be happy to answer any questions you may have.

Last revised: May 30, 2001