beyond them. They all have valid applications, and, in practice, different cases will probably require different solutions. However, there is one principle that must serve as the foundation for any partnership aimed at developing countermeasures for bioterrorism. It is the principle of risk sharing.

Drug and vaccine development is an incredibly high-risk business. Front-end costs start big and grow bigger as development proceeds. The total is often something like $800 million by the time a successful drug is launched—10 years or more from the day it was discovered. The odds against success are long—one compound in 5,000 makes it all the way from the test tube to the pharmacy shelf. And even among newly launched products, only one in three earns back its development costs. Public policy makers must consider whether drugs and vaccines could be developed more cheaply, given the compounds that are languishing in the developmental pipeline because bioterrorism is a small and uncertain market.

At the front end, government could help defray some of the costs associated with discovery and early-stage development. Grants and other forms of direct investment might help, especially with smaller organizations. But given the current needs related to antibiotic resistance in naturally occurring pathogens and to the decline of innovation in antibiotic-drug discovery, risk sharing may need to be considered more broadly.

Government could further reduce the risk to industry by providing some form of legal relief from the product-liability issues associated with new countermeasures. Risk sharing could also help to lower the costs of purchasing and storing biodefense drugs—whether existing or to be developed.

The government’s current practice is to determine what quantity of a given material it may need, issue a contract to purchase that quantity, and then stockpile it until needed. This process works well for some products, but it is a very expensive way to purchase pharmaceuticals. A more cost-effective approach would be to contract with drug manufacturers for assured access to the necessary quantities. The manufacturers would have to be able to prove beyond doubt that they could deliver the requisite quantities within the needed time frame. It is essential that production capability occurs at more than one facility and that these facilities be based within the United States. The government would reimburse the cost, build and maintain the inventory, and add a modest profit. In the event of an attack, the government would take control of the inventory at no additional cost. Meanwhile, responsibility for addressing such additional risks as unforeseen spoilage would rest with the manufacturers.

Recommendation 3.17: Facilitate vaccine and therapeutics production. Through public-private partnerships, create research, development, and manufacturing capacities to produce diagnostics, therapeutics, vaccines, and devices to counter terrorism and an oversight laboratory to evaluate, prepare, and standardize methodologies.

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