Tight Funding Caps Leave Too Little for Biodefense

The pending House and Senate 2016 appropriations bills fall far short of what the Administration says it needs for two programs funding the development and production of drugs, vaccines, and other items to respond to biological, chemical, or nuclear terrorism.  That’s due to tight annual caps on appropriations spending under the 2011 Budget Control Act (BCA) and the sequestration cuts that reduced the caps even further.

Run by the Department of Health and Human Services (HHS), the two programs are among the many security-related activities that fall under the BCA’s cap on non-defense appropriations.  But they also show more generally how the caps, as lowered by sequestration, are making it hard to meet a broad array of national needs.

As concerns about terrorism grew, and particularly after the 2001 anthrax attacks, policymakers moved to develop and stockpile new or improved medical countermeasures — drugs, vaccines, diagnostic tools, and other supplies to protect against or treat the consequences of biological, chemical, nuclear, or radiological attacks.  With little commercial market for most of these countermeasures, they recognized the need for government support.

Congress established two programs within HHS.  The Biomedical Advanced Research and Development Authority (BARDA) provides financing and other assistance to pharmaceutical and biotechnology firms to develop and test potential drugs, vaccines, and supplies.  And the BioShield program enters into contracts with firms when a product is in advanced stages of development, agreeing to buy a specified quantity of the item once it’s ready — thereby guaranteeing a minimum market. 

Initially, policymakers funded these programs through an emergency appropriation that covered costs through 2013.  Since 2014, however, both BioShield and BARDA have been funded through regular annual appropriations, totaling $670 million in each of 2014 and 2015.  As HHS programs, this funding falls under the BCA cap on non-defense appropriations — not the defense cap. 

For 2016, the Administration proposes boosting the appropriation for these programs by nearly $500 million.  Most of this increase is for BioShield, so that it can buy improved vaccines against anthrax and smallpox, new devices for measuring radiation exposure, new treatments for radiation sickness, and new antidotes for nerve gases — all products that have been supported through BARDA in earlier stages and that HHS expects will be ready for BioShield contracts in 2016.  The additional funds for BARDA are largely to support development of new products to deal with drug-resistant bacteria. 

The Administration’s recommended increase for these biodefense programs comes in the context of its proposal to provide relief from the BCA’s sequestration reductions, offset with alternate savings — following the model of the bipartisan agreement that provided sequestration relief for 2014 and 2015 appropriations.  By proposing to lift the caps, the Administration can address a wide range of pressing needs.

In contrast, the congressional Republican budget calls for strictly adhering to the caps.  Within these tight limits, the Labor-HHS-Education appropriations bills approved by the House and Senate Appropriations Committees provide none of the requested increase for BioShield.  For BARDA, the House bill provides no increase and the Senate bill provides only about half the requested increase. 

The House and Senate committees don’t dispute BioShield or BARDA’s necessity, or provide any specific reason for not providing the proposed increases.  On the contrary, Congress in 2013 overwhelmingly reauthorized BioShield and BARDA.   Rather, this seems one of many examples of BCA caps that are too tight to address a national need.  The solution to this — and numerous other funding shortfalls — is to raise the caps by replacing sequestration with a balanced package of alternate savings.