Statement of Honorable John J. Hamre, General Anthony Zinni, General John Keane, Honorable Dave Oliver,
Lieutenant General Ronald R. Blanck

Deputy Secretary of Defense


Chairman Buyer and Distinguished Committee Members, I am honored to appear before your Committee today to address your questions about the Department of Defense (DOD) Anthrax Vaccine Immunization Program (AVIP). I am Dr. John J.Hamre, Deputy Secretary of Defense. I am accompanied today by General Anthony C. Zinni, Commander in Chief Central Command, General John M. Keane, Vice Chief of the Army, Lieutenant General Ronald R. Blanck, Surgeon General of the Army, and the Honorable David Oliver, Principal Deputy Under Secretary of Defense, Acquisition and Technology. At your request, our testimony will specifically address the anthrax threat, the safety and efficacy of the anthrax vaccine, an update on the immunization program itself and programmatic reports on the procurement of new vaccine.


General - Currently, at least ten nation states and two terrorist groups are known to possess, or have in development, a biological warfare capability. The production of biological warfare agents does not require specialized equipment or advanced technology. When comparing equal amounts of biological and chemical warfare agents, the biological agent is far more potent. Small quantities of biological agents can produce large numbers of casualties. Biological agents can be delivered through a number of means; including aerial bombs, artillery shells, long-range missiles, agricultural sprayers, and spray tanks carried by aircraft, ships, boats or even cars. Many of the materials and equipment that are used to produce biological warfare agents are available from legitimate sources and intended for other uses such as pharmaceuticals or biopesticides, thus making it difficult to limit the spread of biological warfare technologies and capabilities.

Anthrax Itself - Of all biological warfare agents, anthrax spores are the top choice in biological weapons for "germ warfare." Several of the countries that have or are developing offensive biological warfare capabilities are most likely working with anthrax. Iraq has admitted to producing and weaponizing anthrax. The anthrax accident at Sverdovsk in 1979 illustrated Russia’s military research with the organism. Anthrax is 100,000 times more lethal than one of the most potent chemical warfare agents, such as VX. Anthrax is an infectious disease caused by the bacteria Bacillus anthracis and spread by contact with infected animals, handling infected products, eating infected meat, or breathing weapon-dispersed anthrax spores.

Anthrax Veracity - Compared to many other pathogens with BW potential, starting cultures of anthrax are relatively easy to obtain. Large quantities of the bacteria can be produced in readily obtainable fermentation vessels. The organism naturally converts to a spore form that can be stored as bulk agent or in filled munitions. When disseminated in air, the spores remain viable much longer than other types of infectious agents. The size of the spores (approximately 1-micrometer) is such that when inhaled, they tend to be retained in the lung. The effects usually are lethal unless rapid diagnosis is made and a combination of appropriate medical measures are administered immediately. One deep breath inhales enough spores to result in fatality. Initial symptoms begin 1 to 3 days after exposure and mimic a cold or the flu. Once symptoms occur, it is too late for vaccination or antibiotic treatment for the vast majority of those contaminated, thus detection or intelligence must be relied upon for diagnosis in sufficient time to allow effective medical treatment. If untreated, death follows within 1 to 5 days after symptoms first begin. Lethality for unvaccinated persons who are contaminated and do not receive near term antibiotics approaches 100%.

Anthrax is considered an effective biological weapon because:

It is almost always lethal if not treated immediately after contact, or prevaccinated.

Spores can be produced in large quantities using basic knowledge of biology.

Spores can be stored for years without losing viability.

Spores can be easily spread in the air by missiles, rockets, artillery, aerial bombs & sprayers.

There is little to no effective treatment for unvaccinated victims who inhale anthrax once symptoms are exhibited .


The Department is using a vaccine that is both proven safe and effective against all known strains of anthrax pathogen. It has been approved by the Food and Drug Administration (FDA) for nearly 30 years, and has been recently received and recertified. There have been no deaths due to anthrax exposure in vaccinated individuals while an untold number of lives have been saved. Twenty nine plus years of usage and a decade of increased scrutiny confirms the vaccine’s safety and has increased confidence in its efficacy.

Coordinated Surveillance for Anthrax Vaccine Safety - The Department of Defense conducts an aggressive, multi-faceted surveillance program to assess vaccine safety. In fact, the safeguards of vaccine administered to DOD personnel meet or exceed every standard for vaccine administration to the civilian population. Our program includes a wide variety of activities that can be grouped into three main scientific method categories: clinical studies of vaccine recipients; database analysis of vaccine recipient automated medical records; and spontaneous reports.

Each of these scientific methods has advantages and disadvantages. As the Centers for Disease Control & Prevention (CDC), the FDA, and trained epidemiologists discovered over time, these methods need to be used in tandem, to fully understand whether or not an adverse event was caused by a vaccine or merely coincided in time with the vaccination.


DOD follows the convention of CDC, FDA, and the nation’s public health and epidemiological specialists in distinguishing adverse events and adverse reactions. Adverse events are adverse outcomes, for which a cause-and-effect relationship with an exposure (to a medication or vaccine) has not yet objectively been determined. An adverse event becomes an adverse reaction once objective evidence is available to establish a cause-and-effect link between an exposure and an adverse outcome. Table A lists some of the criteria proposed many years ago by famed epidemiologist Sir Austin Bradford Hill that help us make the determination of causal association.

The CDC publication, Epidemiology and Prevention of Vaccine-Preventable Disease, 5th ed., January, 1999, discusses the most reliable and conclusive ways to establish causal relationships for vaccine adverse events — and they are relatively few. Causal links between a vaccine and an adverse event may be established if they produce a unique laboratory result, a unique clinical syndrome, or if an epidemiological study shows vaccinated persons are more likely than unvaccinated persons to experience the adverse event.

Numerous clinical studies have been conducted on the safety of the anthrax vaccine, in which both long and short-term side effects of the anthrax vaccine.

These nine clinical safety studies utilizing 12,574 subjects, as well as all the studies in aggregate, uniformly concluded that adverse reactions associated with anthrax vaccine involve local injection site reactions or minor, transient, self-limited, systemic events like malaise, muscle ache or headache. As important to note during the surveillance described above, no deaths occurred following doses of anthrax vaccine, nor have there been any cases of severe allergic hypersensitivity reactions (known as anaphylaxis). The anthrax vaccine clearly has a side-effect profile comparable to, or better than other known vaccines. This is graphically depicted in Attachment 1.

Comparison of Anthrax Vaccine with Other US Vaccines - The safety data on the anthrax vaccine compare very favorably with safety data for other vaccines licensed in the United States. For the hepatitis A vaccine, soreness at the injection site was reported by 56% of adult vaccine recipients; headache was reported by 14%. For the typhoid polysaccharide vaccine, local tenderness was reported by 98%, pain by 56%, malaise by 24% and headache by 11%. The pneumococcal vaccine has a 71% rate for localized soreness. The recently licensed Lyme disease vaccine produced localized pain in 93% of recipients and fever in 2.5%. The hepatitis B vaccine reports a local reaction rate of 17% and a systemic reaction rate of 15% in adults.

Additional Long -Term Study - The DOD leadership, its physicians and its research experts are confident of the safety and efficacy of the anthrax vaccine. Our leaders also respect the concerns expressed by a small number of service members about possible long-term health effects and want to address these concerns using the best, most appropriate scientific knowledge and practices. We will continue demonstrating an ongoing commitment to ensuring the health of our men and women as we implement the AVIP.

On July 29, 1999, the Anthrax Vaccine Immunization Program Agency convened a team of civilian and military medical experts to design a set of studies to assess the long-term safety of the anthrax vaccine, in response to requests from Service Members, their families and recommendations of the General Accounting Office. In designing these studies, we have drawn from the accumulated experience of some of the nation’s best vaccine researchers at CDC and FDA.

A new long term study is also underway to determine whether individuals who received multiple vaccines, including the anthrax vaccine, during their past employment at Ft. Detrick, MD demonstrated any adverse health effects over the long term. A total of 570 study and control volunteers have been enrolled in this case-controlled study that began in 1996. All volunteers signed an approved informed consent document. The study media included a 9-page health history questionnaire, extensive blood tests and urinalysis. The questionnaire queries mental and physical conditions of progeny as well as the health of volunteers. Study end points include symptoms, symptom complexes (including the Gulf War Illness complex of symptoms), diseases, abnormal laboratory and urine tests. Study subjects will be compared to 2-3 race, gender, and age-matched control subjects to determine if any long-term medical effects exist among this unique group of study subjects. Analysis of the data from the extensive health history questionnaire and numerous laboratory tests is currently in progress.

Vaccine Adverse Event Reporting System- Additionally, DOD emphasizes/encourages, reporting of adverse vaccine events through the use of Form VAERS-1 in the following publications/policies/initiatives:

The April 99 updated DOD "Force Health Protection Against Anthrax Leaders Briefing," is given to all Service Members and DOD Emergency Essential Civilians by supervisors/commanders prior to administering the anthrax immunization. Slides 12, 13, 14 clearly state that, "any vaccine associated adverse event may be reported through VAERS by either the patient of provider…in writing or by calling 1.800.822.7869…reporting instructions are available on the Internet at"

u The April 99 updated DOD "Anthrax Vaccine Immunization Program Health Care Providers Briefing," slides 31, 32, 33 provide clear clinical guidelines for VAERS reporting in addition to the guidance provided in the Leaders Briefing above.

u DOD Policy Memorandum "Policy for Reporting Adverse Reactions Associated with the Anthrax Vaccine Immunization Program (AVIP)" created 30 Jun 98, issued 21 Apr 99 for Service coordination/implementation outlines clinical protocols and algorithms for submitting VAERS. This policy also requires submission of an "Anthrax Vaccine Adverse Reaction Supplemental Form" in addition to the VAERS.

u DOD Policy Memorandum "Ensuring Reservists Have Full Access to Department of Defense (DOD) Medical Treatment Facilities (MTF) for Treatment of Adverse Events from DOD Directed Immunizations" staffed May 99, clearly outlines patient or provider submission of Form VAERS-1. The Memo will be accompanied by a Patient Information ‘walk-away’ brochure outlining facts about the anthrax vaccine, local and systemic reactions and adverse event reporting options, phone numbers, instructions, Internet access, etc.

u DOD Clinical Practice Guidelines for the Management of Anthrax Vaccine Adsorbed Adverse Events, were drafted during the 25-27 May 99 Annual DOD Conference for Biological Warfare Defense Immunizations. Over 150 personnel attended this AVIP Agency sponsored conference from the Services and Interagency participants (CDC, Department of Health and Human Resources, Johns Hopkins University, FDA, George Washington University, Armed Forces Epidemiology Board, Joint Vaccine Acquisition Program, Center for Health Promotion and Preventive Medicine, US Army Medical Research Institute of Infectious Diseases, Government Accounting Office, etc.). The Guidelines outline clinical protocols, pre-treatments, specialty referral processes, contraindications, categorization of local and systemic reactions and associated treatment algorithms. The Guidelines clearly outline patient or provider reporting of Form VAERS-1 with all associated phone and Internet access numbers. After a synchronized staffing with the Services, Federal Agencies and other institutions, we will distribute the Guidelines worldwide, including posting on the web and all associated, linked health care sites.

u Form VAERS-1 reporting options, sources of information, and downloaded copies of the form are a prominent feature of our newly revised anthrax website with separate hot button access to adverse reporting.

u The AVIP Agency’s 1.877.GETVACC hotline, prominently features patient or provider reporting of adverse events.

u The AVIP Open House/Speakers Bureau effort routinely addresses adverse event reporting, sources of information, etc.

u The AVIP Agency Highlights VAERS reporting in their silent training aids product line in addition to other key things such as those things scheduled, recording all vaccinations, threat, safety, efficacy, etc.

Anthrax Vaccine Expert Committee – Once the VAERS reports are received at the central office, an independent external-review panel we call the Anthrax Vaccine Expert Committee (AVEC) evaluates each report. The AVEC represents a special panel of experts commissioned by the AVIP Agency in early 1998 to review any signaling event that would identify problems stemming from the anthrax vaccine. These experts come from the Health Resources & Services Administration (HRSA), a component of the Department of Health & Human Services sponsored Vaccine Injury Compensation Program (VICP). To date, the AVEC has found no pattern of causality stemming from the use of the anthrax vaccine. The AVEC uses explicit criteria for attributing causality to adverse events coincidentally associated with anthrax vaccination, based on work begun by the Canadian Advisory Committee on Causality Assessment.

Of the 215 reports submitted, 174 have been reviewed by the AVEC, up through their most recent meeting on 29 Jun 99. Of these 174 fully reviewed reports, 50 reported local reactions at the injection site only; 95 reported various systemic reactions only; 29 reported both local and systemic reactions.

As of 1 Jul 99, 153 VAERS reports involved Active Component (AC) members, 17 reports involved Reserve Component (RC) members, and four involved civilians. Thus, 88% were from the AC and 10% were from the RC. The reporting rates were 153 Form VAERS-1 from the 285,164 AC personnel vaccinated against anthrax (54 reports per 100,000 vaccine recipients); and 17 Form VAERS-1 were submitted from the 26,662 RC personnel vaccinated (64 reports per 100,000 vaccine recipients). The total reporting rate among RC personnel is only slightly higher than among active-duty personnel. None of the 17 RC generated reports involved hospitalization. Six of those 17 reports involved lost duty time. As expected, there is no indication that reservists are burdened with a greater risk of adverse events than their active-duty colleagues.

Eight reports discussed Service Members hospitalized with an illness coincidentally related to anthrax vaccination. Five have recovered completely. Among the five Service Members who recovered, the reports described the events as one case each of Guillain-Barre’ syndrome, multiple sclerosis, angioedema involving the left jaw, aseptic meningitis, and severe injection site inflammation. Three of the eight Service Members hospitalized with an illness coincidental to their anthrax vaccination have ongoing conditions: bipolar psychiatric disorder, diabetes mellitus and systemic lupus erythematosus. You will notice that the serious adverse events reported to date are all isolated cases. Only one of each condition was reported, with each condition being an event that also occurs among unvaccinated people. There are no reports of outbreaks of multiple cases of the same disease, other than allergic-type (hypersensitivity) reactions, described below, that are expected with all vaccines and many medications.

The AVEC judged that there was no evidence that the ongoing conditions or the angioedema were caused by anthrax vaccination. The AVEC found evidence submitted through VAERS in the case of the alleged Guillain-Barre’ syndrome was insufficient to reach a conclusion and they are awaiting receipt of additional information. For the cases of multiple sclerosis, aseptic meningitis, the AVEC judged the events were incompatible with a causal association and unrelated to anthrax vaccination. Notably, the AVEC judged the injection site inflammation event as the only case likely caused by the vaccine.

There have been three reports of serious illness coincidentally associated with vaccination that required loss of duty time greater than 24 hours. These reports involved urticaria (generalized itching) with hypersensitivity pneumonia, spondyloarthropathy (a vertebra joint disease), and urticaria with dizziness. The AVEC members judged the cases of urticaria, an allergic-type reaction similar to that seen in other vaccine studies, likely caused by the vaccine. The case of spondyloarthropathy aggravation was a pre-existing condition in the patient.

The DOD uses a broader definition of serious adverse events, as we cast a broader net than the FDA definition of "serious." Twelve VAERS reports were submitted for Service Members who lost duty time greater than 24-hours, but were not hospitalized. These 12 reports outlined some of the following temporary symptoms: dizziness, nausea, fatigue, diarrhea, double-vision, abdominal pain, "flu"-like symptoms, urticaria, neck stiffness, abdominal cramps, inflammation at the injection site, migraine headache, mood swings and hair loss. Some of these events have been seen in other anthrax vaccine studies and are fully expected. Some are caused by multiple factors. The AVEC judged all these events "not serious".

Education & Communication - The Department of Defense is committed to fully educating our Service Member population and their families on the purpose and value of anthrax vaccination in an unprecedented manner. We use each of the following communications media to accomplish this goal:

u A sophisticated anthrax specific website with multiple layers of information and methods for communicating with our Service Member population, their families, and other DOD beneficiaries and concerned members of the American public.

u Three Service - specific anthrax websites hyper-linked to all known military and civilian websites discussing anthrax, biological weapons, health care, domestic preparedness, terrorism, VAERS reporting, preventive medicine, infectious disease, etc.

u Three Tri-fold information sheets individually tailored for Service Members, Family Members and Civilians. DOD issued Tri-folds to each Service Member receiving the vaccine since administering the first doses in March 1998. The Tri-fold explains the threat of biological weapons, the benefits of anthrax vaccination and the known risks from the vaccine. The Tri-fold is currently under revision to become a Quad-fold to include RC specific information on accessing care.

u DOD Leaders Briefing required to be given to all Service Members prior to receiving the anthrax immunization. Distributed by each Service and prominently posted on the website.

u DOD Health Care Providers Briefing given to all DOD health care providers administering the anthrax vaccine — who then serve as teachers, coaches, mentors for supervisors, commanders, Service Members and their families. Distributed by each Service and prominently posted on the website.

u Open House/Speakers Bureau briefings and open educational forums for all Service Members and their families.

u A 1.877.GETVACC telephone hotline was implemented on 1 Sep 99.

u A variety of anthrax vaccine ‘silent training aids’. These highly visible training aids emphasize the key themes of the anthrax threat, safety and efficacy of the vaccine, adverse event reporting, etc.

u Armed Forces Information Service news media, local installation print, radio and television news service initiatives.

A state-of-the-art Anthrax Education CD-ROM which provides Service

Members, families, supervisors, commanders and health care providers with tailored, multimedia information on the anthrax threat, safety and efficacy of the vaccine, signs, symptoms and prevention of anthrax.

u An Anthrax Vaccine Immunization Program Videotape explaining the threat, safety, efficacy of the vaccine. The video features prominent civilian and Government scientists and vaccine experts explaining and endorsing the vaccine.

u DOD is currently collaborating with CDC to array this information in the format of Vaccine Information Statements (VIS) that civilian health care providers around the country give America’s children, adolescents, and adults during routine vaccinations.

u Clinical Guidelines were drafted in May 1999, based on a consensus panel of civilian and military physicians experienced both in immunology and the general provision of health care. After a synchronized staffing with the Services, Federal Agencies and other institutions, we will distribute the Guidelines worldwide, including posting on the web and all associated, linked health care sites. Guidelines represent DOD’s concerted effort to standardize the evaluation and care of people who have adverse events after vaccination against anthrax.

Exemptions, Waivers and Deferrals Reporting - We refer to waivers and deferrals collectively as exemptions. Within the category of exemptions, we recognize temporary exemptions (temporary delay from receiving additional doses of anthrax vaccine, such as during the course of an acute illness, pregnancy or similar short-term condition) and permanent exemptions (a long-term postponement from receiving additional doses of anthrax vaccine). Although the Services collaborate in designing the administrative and medical criteria for exemptions, each Service reports exemptions according to the needs of the individual Service. The U.S. Army can identify locally and centrally all doses administered, as well as all administrative and medical exemptions in its Medical Protection System (MEDPROS) database. The U.S. Navy and U.S. Marine Corps can identify local doses administered using the Shipboard Non-tactical Automatic Data Processing Program (SNAP) Automated Medical System (SAMS). The U.S. Air Force tracks local doses administered, as well as exemptions, using its Military Immunization Tracking System (MITS). All four services transmit data to the central Defense Enrollment Eligibility Reporting System (DEERS) database.

Monitoring and Compliance Reporting - Monitoring and compliance using guidelines discussed in the preceding paragraphs are an ongoing quality assurance/quality improvement responsibility of both individual medical treatment facilities and the DOD military health system. Overarching guidance is established in a variety of ways, including standards printed in the joint immunization instruction, "Immunization and Chemoprophylaxis Regulation" (Army Regulation 40-562, Bureau of Medicine & Surgery Instruction 6230.15, Air Force Joint Instruction 48-110, Coast Guard Commandant Instruction M6230.4E), dated 1 November 1995. This regulation represents the current standard for immunizations and chemoprophylactic practices within the military health system. In addition to this joint regulation, each Service formal anthrax immunization implementation plan addresses clinical aspects of vaccine administration. Furthermore, we have begun additional programs to train health care providers before the next major phase of the anthrax vaccine immunization program. In May 1999, the AVIP Agency sponsored the "First Annual DOD Conference for Biological Warfare Defense Immunizations" at Fort Detrick, Maryland, to allow a self-motivated group of clinicians the opportunity to discuss/review the AVIP and conduct a peer review of key clinical program elements.

Documentation - There are several other quality assurance/quality improvement measures commonly adopted in medical treatment facilities to ensure the highest clinical standards are fulfilled. All clinical encounters (e.g. immunizations administered, sick call visits, hospitalizations, etc.) are documented in the patient’s health record (HREC). Each dose of anthrax vaccine is recorded in service-specific and DOD-wide tracking systems. The service-specific tracking system reports when a Service Member is due the next dose or has been waived or deferred.

Clinical Panels - At the facility level, health care providers use panels called morbidity-&-mortality committees to discuss and investigate negative outcomes such as death (none of which have been reported to date from anthrax vaccination). Medical treatment facilities have pharmacy & therapeutics (P&T) committees to review and encourage reporting of all medication-related adverse events (including those involving vaccines). Medical treatment facilities submit reports of their quality assurance/quality improvement programs to each Service medical headquarters for corporate review and analysis. To monitor and assure compliance, all Services report any adverse events weekly to their higher medical headquarters.

Inspector General Study - A DOD inspector general (IG) study begun Nov 98 is still underway to measure compliance with requirements to document anthrax vaccination. Data is still being collected and a final IG report is scheduled for October 1999.

Deployment Eligibility Guidance - We currently immunize Service Members assigned or attached to units deployed or scheduled to deploy to any of the ten high threat areas — presently the Arabian and Korean Peninsulas. This is an interim step. Eventually, the anthrax vaccine will be given to all personnel

Guidance to Service Members, Emergency Essential Civilians and contractor personnel regarding deployment eligibility involving anthrax vaccine is found in:

u Each Service anthrax immunization implementation plan.

u In the DOD Country/Theater Clearance Guide.

u In the "One Day Policy" issued 30 Mar 99 by the Secretary of Defense establishing a policy requiring anthrax immunization for duty in any of the current high-threat areas of one day duration or more.

According to the Service implementation plans for anthrax immunization, DOD policy states "a Service Member will be considered deployable if he/she is enrolled in the six shot series [received at least one shot], regardless of whether or not he/she has completed the series. The DOD goal is to receive the first three immunizations (at 0, 2 and 4 weeks) before entry into high threat areas because of the high degree of protective antibodies conferred. This alleviates some of the complexities of having to vaccinate personnel in a high threat area while trying to focus on contingency operations. Anyone unable to comply with vaccination prior to deployment begins or continues the vaccination series upon arrival. Clearly the DOD objective is to begin vaccinating the Total Force in order to eliminate potential problems with deployments.

Our National and Military Security Strategies are founded on a posture of global engagement and emergency response, often requiring no-notice or short-notice deployment of AC and RC units and individuals who deploy, fight and support as teams. DOD is committed to protecting Service Members and Emergency Essential Civilians and contractors with a full anthrax vaccination series. Our program is sufficiently flexible to allow for individual waivers and deferrals when in the individual’s best interests, based on objective scientific, clinical expertise and operational requirements.

DOD has conducted numerous studies to assess the safety and efficacy of the anthrax vaccine. To date, there is no evidence of a pattern of serious, long-lasting adverse reactions caused by the anthrax vaccine. The majority of personnel tolerate the vaccine without prolonged side effects. There have been some individuals who experienced illness in temporal association with the vaccine. We are continuing to evaluate, treat and follow these patients. In view of the small numbers relative to the total population immunized, causality cannot be determined at this time. An independent panel of civilian academic experts, from some of America’s best clinical institutions confirms our findings. The Department of Defense is and will continue to be vigilant in our surveillance for any rare, unexpected reactions to anthrax vaccine. We are committed to fully investigating all allegations against the safety of the anthrax vaccine and continuing full and complete disclosure of all risks, based on objective evidence. DOD will provide evaluation and care for any vaccine-related problems.


Anthrax Vaccine Adsorbed is the only anthrax vaccine licensed by the U.S. FDA. In accordance with DOD Directive 6205.3, Immunization Program for Biological Warfare Defense and Title 21 Code of Federal Regulations, the FDA and the Department of Defense emphasizes and relies upon private sector production and stockpiling of FDA-licensed vaccines. The DOD recognizes the FDA licensure as the standard that determines if a vaccine is safe and effective for its intended use. Under its regulations as promulgated in Title 21 of the Code of Federal Regulations, the FDA licenses both the biologic production and storage establishments. Only the FDA Commissioner may waive the regulatory requirements of Title 21 of the Code of Federal Regulations.

Historical Information - Anthrax Vaccine Adsorbed is produced by the BioPort Corporation of Lansing, Michigan, which is the only FDA licensed establishment for the production, testing, and storage of Anthrax Vaccine Adsorbed. The facilities and operations of BioPort were previously owned by the State of Michigan under the Michigan Department of Public Health until the passage of State of Michigan Public Act in December of 1996 (and amended in 1998) requiring privatization through sale. A temporary organization, the Michigan Biologic Products Institute, operated the facilities until the finalized sale to BioPort in September of 1998.

BioPort’s facility has been licensed to manufacture the anthrax vaccine since 1970. Prior to Operation Desert Storm, the primary market for the anthrax vaccine was laboratory, veterinary, and industrial workers at risk of exposure to naturally occurring anthrax. In May 1988, a competitive solicitation was issued for anthrax vaccine production with only one responder, the Michigan Department of Public Health. An award was made in September 1988 to the Michigan Department of Public Health for 300,000 doses of anthrax vaccine (Contract No. DAMD17-88-C-8242 for $2.1 million).

During Desert Storm, DOD sought exigent additional anthrax vaccine manufacturing capacity to meet U.S. and coalition force requirements for protection against the Iraqi biological warfare threat. In September 1990, Contract No. DAMD17-90-C-0159 for $4.7 million was awarded (10 lots/approximately 70,000 doses per lot) as a sole source procurement to the Michigan Department of Public Health, to allow for the immediate scale-up of the FDA licensed anthrax vaccine in support of urgent DOD requirements resulting from Desert Shield Operations and Desert Storm expectations. The Justification and Approval cited both the urgent need and the fact that the Michigan Department of Public Health was the sole FDA licensed producer of anthrax vaccine as the reason for the award.

Following Desert Storm in May 1991, a competitive solicitation was again issued in an effort to generate alternate sources for the production of 6.3 million doses of anthrax vaccine. Two responses were received, one from the Michigan Department of Public Health and one from Program Resources, Inc., which would have used existing facilities at the National Cancer Institute, Ft. Detrick, Maryland in cooperation with the Michigan Department of Public Health under their existing license. Program Resources, Inc. was to have produced bulk product, which would then be shipped to Michigan for filling and testing. Both bidders were awarded contracts. With the end of Desert Storm, the urgent need for the anthrax vaccine was no longer valid. Subsequently, it was determined that the necessary FDA recommended improvements at the Program Resources, Inc. and the National Cancer Institute facilities were not cost-effective and the contract was terminated, with continued production falling to the Michigan Department of Public Health under a $33.5 million contract (DAMD17-91-C-1139).

On 19 May 1994, the Deputy Secretary of Defense also approved the Joint Program Office for Biological Defense Charter providing the Department with an office specifically tailored to address the development and procurement issues surrounding biological defense. Studies sponsored by the Department identified significant inadequacies in the abilities of the U.S. and international industrial base to respond to DOD vaccine development, testing, and manufacturing requirements. Alternatives, including Government-Owned and Government-Operated single and multi-purpose facilities, Government-Owned and Contractor-Operated, and prime systems contractors were all considered. On 26 January 1996, the DOD decided to initiate a program using a prime systems contract approach to develop, procure, and stockpile new biological defense vaccines. In order to maintain a continuous supply of the anthrax vaccine, the Joint Program Office for Biological Defense contracted with the Michigan Biologic Products Institute to produce and stockpile the DOD requirements for anthrax vaccine.

In the fall of 1998, BioPort became the sole licensed producer of the anthrax vaccine via a privatization process initiated by the State of Michigan. After the sale, a contract award was made in September 1998 (Contract No. DAMD-17-88-8242 for $2.1 million). The Department of Defense was not a party in the sale of the Michigan Biologic Products Institute to BioPort. It was the responsibility of the Michigan Biologic Products Commission. DOD’s only role was to emphasize the importance of the vaccine in support of national security. Formal transfer from State control to private ownership by BioPort was completed on 5 September 1998.

Initially, twenty firms expressed interest in purchasing the Michigan Biologic Products Institute. This group was reduced to five serious contenders and eventually two. In June of 1998, the State Administrative Board unanimously approved the sale of the Michigan Biologic Products Institute to the highest bidder, BioPort, for nearly $25 million in cash, secured notes, product donations, and royalties. The law authorizing the sale required the State Administrative Board to conduct an independent financial evaluation of the sale price. The law also required the Auditor General to review the entire sale process and report to the Legislature before the transaction was approved. Both of the independent evaluations confirmed the appropriateness of the Commission’s conduct during the sale and the fairness of the deal to the taxpayers of Michigan.

Due to the difficulties in transitioning Michigan Biologic Products Institute from state ownership to a private corporation, there was a risk that DOD would lose the only FDA licensed production source for the anthrax vaccine. Furthermore, their regulations could preclude access to any vaccine in the current stockpile if the facility was not sold and the Michigan State Government declined to continue operations. Anticipating these issues, the Joint Program Office for Biological Defense completed an assessment of the situation to evaluate alternatives, recommend solutions, and develop a plan for corrective actions.

In completing an Industrial Capabilities Assessment, it was determined that while a series of alternatives were available, only two options were realistic in meeting DOD’s requirements: (1) to seek alternative manufacturing sources and (2) maintain current capability. In fleshing out these two options, alternative manufacturing sources were eliminated because they could neither meet FDA licensure requirements to support total force immunization by 2004, nor guarantee access to the current stockpile. The Joint Program Office for Biological Defense estimates that a new manufacturer would require eight to twelve years to develop a vaccine through the technology base, surrogate model testing, and the FDA licensure process. The only viable alternative that will support the current policy of total force vaccination is to continue with the current BioPort manufacturing facility.

In evaluating the industrial base in the biological defense area, the Department has found that there has been very little interest by U.S. commercial firms in producing biological defense products for the DOD, including anthrax vaccine, for four reasons;

First, major phamaceutical firms typically expect their products to produce in excess of $200 million in annual sales. However, at its peak, DOD requirements will only contribute a small piece of this profit expectation. Consequently, there is a very low return on investment and other manufacturers are deterred from entering the market to share in the low returns.

Second, the Anthrax Vaccine Adsorbed itself also places limits on the manufacturing infrastructure. As the anthrax vaccine utilizes a spore-forming organism in the fermentation process, Title 21 of the Code of Federal Regulation, Sections 600.10 and 600.11, requires all capital facilities, to include production equipment and buildings associated with spore-forming production, to be solely dedicated to the production of that one item. This adversely affects capital costs and severely limits alternative investment options since the equipment and facility can never be used to produce any other product.

Third, a January 1994 Report of the Economic Analysis for a Biological Warfare Defense Vaccine Production Facility found that, "product liability is a significant problem area for vaccine manufacturers and a major cause for the exodus of vaccine manufactures from the market." The report further explains that manufacturers of biological defense vaccines hesitate to enter into production contracts with DOD since DOD is unable to provide the manufacturer with a guarantee of product liability protection.

Fourth, there are concerns by U.S. commercial pharmaceutical firms that supporting DOD in this business area is inherently high risk because of changing requirements and inconsistent support for programs. Therefore, the manufacture has difficulty predicting quantities and schedules.

Contract Renegotiations - In June 1999, BioPort Corporation submitted a request for Extraordinary Contractual Relief under Public Law 85-804 to preserve the company’s financial viability and ensure uninterrupted production of the anthrax vaccine. The necessity to renegotiate BioPort’s contract arose as a result of poor accounting of production costs prior to privatization. During state ownership under the Michigan Biologic Products Institute, the State of Michigan supplied services and funding to maintain operations. Essentially, the Michigan taxpayers had subsidized for years the Defense Department’s procurement of Anthrax vaccine.

In support of DOD’s relationship with BioPort, the Defense Contract Audit Agency conducted three recent audits of Bio Port. Audit No. 2261-99G11070001, dated 11 June 1999, found that BioPort’s accounting system on the accrual basis complied with Generally Accepted Accounting Principles. However, inadequacies in the current accounting system adversely affected BioPort’s ability to determine the cost required to produce each product, including the anthrax vaccine. Consequently, BioPort could not provide, nor could the Defense Contract Audit Agency determine, the cost to produce Anthrax Vaccine Adsorbed. Audit No. 2261-99G17600008, dated 11 June 1999, evaluated BioPort’s financial condition to determine if the contractor had adequate financial resources to perform on Government contracts in the current and near term. Audit No. 2261-99G17200004, dated 21 July 1999, audited the request for extraordinary relief. The results of this audit were used to identify the per dose price for contract renegotiations.

In evaluating the fair market cost for the anthrax vaccine, the Department evaluated several independent estimates. One estimate provided by the Michigan Biologic Products Commission concluded that the Fair Market Value of the vaccine to be $3.25 per dose (not realizing how much the facility was subsidized by the State). The DoD used this estimate in calculating the September 1998 contract. At the same time, the Defense Contract Audit Agency, in order to assist the contracting officer, computed a composite financially viable price of $9.59 per dose, which proved to be much more accurate. Additionally, two years ago, the Deputy Undersecretary of Defense for Industrial Affairs estimated the cost to be $7.50 per dose.

As required by statute, the Army Contract Adjustment Board, which is delegated the responsibility of reviewing requests and providing such relief when necessary, determined that such action would facilitate the national defense. A multi-disciplined team led by the project manager briefed the Board that their cost flow analysis yielded a price of $10.64 per dose to keep BioPort financially viable to deliver vaccines during the contract period. The Defense Contract Audit Agency Great Lakes Branch Manager agreed that the price of $10.64 per dose was supportable. On 27 July 1999, the Army Contract Adjustment Board issued its decision. The Board decided to increase the contract per-dose price, decrease the total doses to be purchased, and exercise early the final option of the contract. The contract price was increased by $24.1 million. This contract provides 3.4 million doses per year at a FY 2000 price per dose of $10.64 and declines in FY 2001 to $8.42—the previous contract per dose price was $4.36 for 2.5 million doses with an option price that declined to $2.26 per dose for 5.4 million doses. Included within the $24.1 million is the authority for a total of $18.7 million in advance payments to BioPort for future production. It is important to note that the terms of this renegotiated contract mandate a repayment to DOD by the third quarter 2001. The Board also imposed conditions to protect the Government investment by requiring that the DOD hold a first lien on BioPort’s facilities and land. The Board’s decision was implemented by the negotiated contract modification.

By comparison, DOD routinely purchases a number of comparable vaccines at a range of $10.00 to $80 per dose. The Diphtheria, Pertussis, Tetanus Acellular vaccine is the one process most similar to the anthrax vaccine and is the estimate ($10.15) closest to the anthrax vaccine purchase cost. Attached to my statement (Attachment 2) is a list of vaccines procured by the Department with their costs.

Programmatic Implications - The Department of Defense is working with BioPort, the only FDA licensed manufacturer of the anthrax vaccine in the world, to ensure the viability of the facility with the production capability to provide a sufficient supply of the vaccine to meet Department of Defense requirements. If we carelessly drive BioPort into bankruptcy, the immunization program to protect the U.S. service members is at risk and our warfighters will be vulnerable to the extremely lethal and present danger of anthrax exposure resulting biowarfare or bioterrorism.



The Secretary of Defense named the Secretary of the Army as the Executive Agent for the Anthrax Vaccine Immunization Program (AVIP). Per the Secretary of Defense’s further direction, the Secretary of the Army assigned the Army Vice Chief of Staff to:

implement vaccine acquisition and stockpiling,

manage and administer the overall program,

serve as the focal point for the submission of information from the Services relating to vaccine adverse reactions and vaccine projected program requirements,

monitor the Services’ implementation of the program,

execute the Army’s implementation plan, and

report quarterly to the Under Secretary of Defense (Personnel and Readiness) on the progress of the program

The Secretary of Defense directed each of the Service Secretaries to implement, monitor, evaluate, and document the AVIP in their respective departments and to coordinate with the Executive Agent all required information and any special, operationally necessary implementation requirements of their respective Services.

The Army Vice Chief of Staff performs his responsibilities through two organizations: the AVIP Agency and the AVIP Synchronization Team.

The AVIP Agency, an organization under the direction of the Army Surgeon General and the Assistant Surgeon General for Force Projection, work the day-to-day responsibilities assigned to the Army Vice Chief of Staff. The Agency is the Department’s central source for AVIP information and education products and manages the AVIP internet web site and toll-free information line; they daily support requests for information from commanders in the field, service members, DoD civilians, family members, the media, Congress, and the American public. The AVIP Agency provides a Department focal point for AVIP policy coordination, stockpile management and requirements, vaccine distribution, and scientific research. Not only do they monitor the Services’ program execution and compliance, but daily facilitate execution across the Services. During its 18 months of operation, the AVIP Agency has grown to 17 full-time personnel and continues growth to meet Program requirements. Its budget was $5.4 million in FY99 and is projected at $7.4 million in FY00.

The AVIP Synchronization Team is chaired by the Army Vice Chief of Staff and consists of one-star general officer representatives from each Service (Army, Air Force, Navy, Marines, and Coast Guard), the one-star general officer Director of the Joint Program Office for Biological Defense, and Senior Executive Service representatives from the Assistant Secretaries of Defense for Health Affairs, Legislative Affairs, Public Affairs, and Reserve Affairs. The Synchronization Team provides oversight, coordination, and synchronization of all the Department’s AVIP efforts and initiatives, cross-cutting Service lines to facilitate policy and program execution. Separate Subcommittees in Legislative Affairs, Public Affairs, and Reserve Affairs meet regularly and make recommendations for program improvement to the AVIP Synchronization Team.

The AVIP Synchronization Team’s goal for the Department’s AVIP is to "Ensure the safe, timely and complete immunization of the Total Force with maximum confidence in the safety and efficacy of the anthrax vaccine by Service Members, DOD civilians, their families and the American public." Toward this goal, each subcommittee identified improvement initiatives in four areas for consideration by the AVIP Synchronization Team: overall program execution, legislative, communications, and Reserve Component execution. In turn, this Campaign Plan has been briefed to me and approved for action. The AVIP Synchronization Team, in coordination with the subcommittees, is currently developing the Department’s Campaign Action Plan, assigning responsibilities and milestones.


Our Service men and women in at least two major theaters go to work everyday in areas where bioweapons could be delivered any night while they sleep. Taking advantage of prevailing winds and haze on darkness, an area larger than 4 to 5 U. S. states could be saturated with toxic antigens by sunrise. Intelligence reporting in advance cannot be relied upon. Biodetectors are still in a very early state-of-the-art existence and have sensitivity concerns. Protective clothing and equipment is available, but they cannot fight in it very well or for very long. Antibiotics are available, but must be used in the first few hours of exposure and before side effects appear. Once given antibiotics our service personnel will be incapacitated for a time to cope with chronic diarrhea. The only reliable protection is vaccination. Our personnel deserve our best and fullest protection. The FDA tells us that full protection comes with a multiple shot protocol. We cannot wait until the balloon goes up to begin the vaccination protocol. Being vaccinated may very well save the life of thousands should some state, some irrational actor, or some unknown terrorist ever elect to employ what we know they are already capable of using. It would be a dereliction of duty to have the vaccine capability we presently have and not make it part of the prior training and protection we provide our servicemen and women. Secretary Cohen, General Shelton, the other Service Chiefs and I are together and committed not to make such an oversight or commit such a failure. We hope anthrax is never used as a weapon, but if it is, we must be ready!

Attachment 2



Price per Dose Source



Cholera Vaccine


Prime Vendor

Hepatitis A Vaccine


Prime Vendor

Merck National contract
Hepatitis B Vaccine, Recombinant


Prime Vendor

Hepatitis B Vaccine, Recombinant


Prime Vendor

Japanese Encephalitis Vaccine


Prime Vendor

Meningococcal Vaccine, Quad


Prime Vendor




Greer Old contract price- No longer available
Polio Inactivated


Prime Vendor

Rabies Vaccine


Prime Vendor

Typhoid Vaccine Acicular Injection



Connaught *FSS price $17
Yellow Fever Vaccine


FSS Direct

Anthrax Vaccine Adsorbed (AVA)


JPO Direct BioPort  
DPT Acellular**


FSS Direct Connaught  



* FSS: Federal Supply Schedule

** Most closely associated to the production of anthrax vaccine.