Germ warfare: agencies scramble to create vaccine market.

• Author: Wagner, Breanne
• Position: BIOWARFARE

When anthrax was delivered to Capitol Hill and media outlets in envelopes in 2001, the prospect of a widespread biological attack became real to the U.S. government.

For Jay Cohen, undersecretary of the Department of Homeland Security's science and technology division, it's the possibility of a biological attack that keeps him up at night.

While nuclear or radiological weapons require a significant capital and physical investment to develop, "in today's genomic world, students with microscopes have the potential to develop biological weapons," he said in an interview with National Defense.

The relative simplicity of deploying a deadly biological agent has prompted the government to seek technological solutions from the private sector. In the aftermath of the anthrax attacks, contractors predicted that a robust biodefense industrial complex would emerge. But so far the market has lagged, experts say.

Eleven government agencies now work on biodefense. Several offices within these agencies award contracts and grants to universities and public health organizations to prepare for biological attack.

"Currently, the U.S. biodefense market consists of a hodgepodge of small niche players blended with very few large biopharmaceuticals and select defense contractors," said Tim Garnett and Andrew Michaels, previous partners at DFI International, a consulting firm now known as Avascent. They noted that the federal market for biodefense technologies is highly fragmented.

Defense and Homeland Security are pursuing disparate vaccination programs to combat different needs for military and civilian populations.

The Department of Homeland Security was given control of Project Bioshield, a program signed into law by President Bush in 2004. The Bioshield Act allocated $5.6 billion in funding through 2013 in an attempt to attract large biopharmaceuticals to develop vaccines, a White House document said. DHS was directed to work with the Department of Health and Human Services and "the heads of other agencies as appropriate" to assess current and emerging threats and subsequently award contracts to companies with the proper countermeasures.

VaxGen, a small firm based in San Francisco, was awarded an $877.5 million contract in November 2004 for 75 million doses of an anthrax vaccine, said Frank Rapoport, a government contracts and public health law partner with McKenna, Long and Aldridge, a Washington D.C.-based law firm. The award was the largest under Bioshield...