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JAMES M. HUGHES, M.D.
NATIONAL CENTER FOR INFECTIOUS DISEASES
CENTERS FOR DISEASE CONTROL AND PREVENTION
DEPARTMENT OF HEALTH AND HUMAN SERVICES
SUBCOMMITTEE ON NATIONAL SECURITY, VETERANS AFFAIRS,
AND INTERNATIONAL RELATIONS
COMMITTEE ON GOVERNMENT REFORM
U.S. HOUSE OF REPRESENTATIVES
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
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
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
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.
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
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
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
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
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