Diagnostics & Imaging Week Contributing Writer

WASHINGTON – The 4th annual Federal Biodefense Research Conference, held here last week, focused on projected FY06 federal funding for defense R&D.

As of now, only three departments have their budgets set, and others still are waiting for the second shoe to drop – a process that can take weeks to months. Only the Department of Homeland Security (DHS), Environmental Protection Agency (EPA) and U.S. Geological Survey have been fully budgeted. Without a budget in place, spending is constrained.

“BioShield 2 legislation is going through markup,” said Frank Rapoport, of McKenna Long & Aldridge, conference chair. “I expect it will be passed by the end of the year.”

Rapoport said he expects the new BioShield to have changes that will extend the legislation beyond drugs and vaccines to include detection and diagnostics.

In addition, $4 billion for avian influenza and pandemic countermeasures R&D has reportedly been discussed in Congress in the past few weeks.

That topic was on the participants’ minds, but the issue has not yet worked its way into budget allocations or funding mechanisms. Kei Koizumi, of the American Association for the Advancement of Science (AAAS; Washington), warned that there could be a shift of emphasis from terrorism to natural disasters relief since the Federal Emergency Management Agency is now a part of DHS.

A concern raised at this conference, as it was two years earlier, is that the spending on BioShield is insufficient to make significant impact beyond anthrax and a few other agents, and much larger funding will be required to develop and prepare to stockpile vaccines and therapies.

With liability questions regarding vaccine development, as well as the sluggish economic returns from markets for stockpiled therapeutics and vaccines, there is still a feeling that new biodefense vaccine development will be for the smaller biotechs “who have little to lose.” The large pharmaceutical companies are likely to be hesitant players.

Koizumi, who is with the AAAS’ R&D Budget and Policy Program, analyzed the 2006 budget, which totals $2.6 trillion.

Biodefense research at the National Institutes of Health (Bethesda, Maryland), remains the largest of all federal agencies, with the National Institute of Allergy and Infectious Disease being its lead institute. NIH bio-defense funding will be at $1.8 billion – the same level as the previous year. However, since there will be an anticipated decrease in biosafety lab construction, “you now have to fill up those buildings,” Koizumi said. “If you have a lab to fill, the research grants should be more plentiful in FY06 than FY05.”

He said he anticipates that biodefense-related research grants should increase by 8% but that much of that might be earmarked for researchers in the newly built facilities.

While about 25 agencies receive funding in that area, the top seven get about 96% of the total. Leading the way is the DHS with an R&D budget of $1.3 billion – it was signed into law last week by President George Bush.

Key to the new budget plan is a record deficit of $500 billion, up from $317 billion in 2005, largely attributable to the war in Iraq and disaster relief. For the first time in years, the budget does not increase defense spending, and domestic spending will not increase either.

The FY06 budget for R&D is pegged at $132 million, up only 0.1%. Most agencies likely will face cuts in R&D funding, especially when the costs of disaster relief become clearer. Furthermore, Koizumi put increases in homeland security to be less than in previous years and most related agencies will see flat or declining R&D funding.

BioShield was funded in 2003 at a level of $5.6 billion over 10 years. There is $2.4 billion left in the budget, said Avital Bar-Shalom of the White House Office of Science and Technology Policy, with some already committed. While the initial spending on BioShield was focused on anthrax, more recent focus has been on radiation and smallpox.

Bar-Shalom and Koizumi both indicated a total spending for biodefense R&D in 2006 of more than $4 billion, slightly higher than in 2005. It includes minor increases for the EPA and Department of Defense.

Koizumi said DHS gained an increase of 4.1% in R&D budget over 2005, with the largest increases earmarked for radiological/nuclear countermeasures, man-portable air defense systems technologies and chemical countermeasures, among others. Agriculture also will be a new priority.

The Department of Homeland Security’s R&D budget for 2006 is $1.3 billion, up slightly from 2005. That spending has gone to industry for the most part, more than 80%. While spending on biological countermeasures R&D remains the largest chunk of the budget, total spending in that area has declined each year for the last two years.

Academic spending has mostly gone to five awarded academic centers of excellence multidisciplinary/multi-institution programs, with up to five more planned.