From the U.S. Government Accountability Office, www.gao.gov Transcript for: HHS's Use of New Public-Private Partnerships to Develop Countermeasures for Diseases Description: The coronavirus pandemic, as well as past infectious disease outbreaks, have raised concerns about our nation's vulnerability and capacity to respond to health threats. In 2016, Congress authorized the Department of Health and Human Services (HHS) to form public-private partnerships with nonprofit entities in order to develop countermeasures--such as vaccines and tests--to diagnose, treat and prevent diseases. We interviewed GAO's Mary Denigan-Macauley, a health care policy expert, to learn more. Related GAO Work: GAO-20-601R, Public Health Preparedness: HHS Has Taken Some Steps to Implement New Authority to Speed Medical Countermeasure Innovation Released: July 2020 [ Music ] [Mary Denigan-Macauley:] HHS is making investments in companies that are developing promising, innovative products. [Holly Hobbs:] Hi, and welcome to GAO's Watchdog Report, your source for news and information from the U.S. Government Accountability Office. I'm Holly Hobbs. The coronavirus pandemic, as well as past infectious disease outbreaks have raised concerns about our nation's vulnerability and capacity to respond to health threats. In 2016, Congress authorized the Department of Health and Human Services to form public-private partnerships with nonprofit entities in order to develop countermeasures, such as vaccines and tests, to diagnose, treat, and prevent diseases. Today, we talk with Mary Denigan-Macauley, a health policy expert and a director from our Health Care Team, about a recent report on efforts by HHS to use the public-private partnerships in response to health emergencies. Thank you for joining us, Mary. [Mary Denigan-Macauley:] Thank you for having me, Holly. [Holly Hobbs:] So, Mary, what do we know about HHS' efforts to use public-private partnerships in response to COVID-19? [Mary Denigan-Macauley:] Well, they use public-private partnerships to help develop countermeasures. And, a countermeasure is something like a vaccine and therapeutics against infectious diseases like the coronavirus. And we can see from COVID why these countermeasures are so important--basically to help our nation get back on its feet. Without a vaccine, we're challenged to get back to learning in school in-person and operating businesses the way we used to without worrying about social distancing. But in general, developing a countermeasure is hard to do, and HHS has to consider a variety of agents. It's not just a natural disease outbreak, but it could also be a chemical attack, radiological or nuclear, as well as an emerging or novel infectious disease that was never seen before, like COVID. Over the last decade, it's unfortunate, but we've had experience having to develop the countermeasures. For example, we've had a deliberate biological attack, when we had the mailing of the anthrax letters, and we had severe outbreaks such as SARS, and Zika, and now the coronavirus. And all of these different events require countermeasures. So, this report focused on one new type of a public-private partnerships that involves HHS working with an independent nonprofit entity that will be able to use venture capital practices to invest in a medical countermeasures development. And Congress provided this new partnership to really help spur innovation. [Holly Hobbs:] So, what might these partnerships look like? [Mary Denigan-Macauley:] Well, a public-private partnerships can take the form of funding, for example, to support a university or a company's efforts to develop or accelerate a countermeasure, and this can involve cost sharing with the private entity to share their costs and the risk.This new effort that we looked at involves partnering with an entity that can use venture capital practices and methods, meaning that HHS is making investments in companies that are developing promising, innovative products. [ Music ] [Holly Hobbs:] So, it sounds like HHS plays an important role in responding to public health emergencies and that these public-private partnerships could aid HHS' efforts but that the department has been delayed in implementing a new public-private partnership effort. Mary, what are HHS' plans for implementing these partnerships, and did we identify any concerns or issues with these plans? [Mary Denigan-Macauley:] At the time we did our work, the agency was planning to release a request for proposals and award a partner by September 2020. And, as of today, they had not yet released that request for proposal. But we did note that they had taken a variety of steps, such as developing a vision. They've hired staff. They're obtaining information and feedback from stakeholders and developing a preliminary plan for what the structure and oversight of the partnership would look like. And these are very positive steps, but HHS did tell us they've been delayed in implementing the final steps, meaning selecting an actual partner, due to the responsibilities related to COVID-19. Some of the stakeholders also identified a number of concerns that could hinder HHS's ability to find an innovative partner. So, for example, there's a statutory limit on the amount of salary that HHS can pay, and stakeholders are worried it'll be too low to be able to attract an individual or an entity to actually manage the innovative partner venture capital fund. And also, by law the innovation partner must be a nonprofit entity, and some stakeholders believe that this is going to limit the pool of candidates. They're also concerned that some would not be interested in partnering with HHS because as a venture capital firm, their goal is to maximize return on investments and that's not what this partnership is about. And then, the old uncertainty of the federal funding streams, and not certain if they'll be there, could also be a deterrent. [Holly Hobbs:] Mary, last question. What's the bottom line of this report? [Mary Denigan-Macauley:] The current pandemic really highlights the importance of countermeasures, particularly a need to be able to produce them quickly, in this case, for a highly infectious disease that we've never seen before and in which we have no immunity. Yet we know from our work that this isn't easy to do. So, it requires flexibility and speed for developing new technologies and approaches, yet the process of researching and developing these medical countermeasures is lengthy. It's complex. It's expensive. And if you add in the challenges, such as low profitability, intellectual property rights, and the general lack of a commercial market to make something that may never be used, it's a pretty daunting challenge. The bottom line is that this new type of public-private partnership is an effort to eventually help accelerate and innovate countermeasure development, and HHS is working with the stakeholders to best understand how to implement this new authority that they've been given, so that it's successful. [Holly Hobbs:] That was Mary Denigan-Macauley discussing GAO'S recent review of HHS's use of public-private partnerships in response to health emergencies. Thank you for your time, Mary. [Mary Denigan-Macauley:] Great, thanks for having me. [Holly Hobbs:] And thank you for listening to the Watchdog Report. To hear more podcasts, subscribe to us on Apple Podcasts. And make sure you leave a rating and review to let others know about the work we're doing. For more from the congressional watchdog, the U.S. Government Accountability Office, visit us at gao.gov.