NIH Funding: FY1995-FY2021 This report provides a historical overview of federal funding provided to the National Institutes of Health (NIH) between FY1995 and FY2021. It also provides a brief explanation of the discretionary spending funding sources for NIH associated with the annual appropriations process (via the Labor, HHS, and Education and Interior/Environment Appropriations Acts) and the mandatory funding for special program on type 1 diabetes research. NIH is the primary federal agency for medical, health, and behavioral research. It is the largest of the eight health-related agencies that make up the Public Health Service (PHS) within the Department of Health and Human Services (HHS). NIH consists of the Office of the Director (OD) and 27 Institutes and Centers (ICs) that focus on aspects of health, human development, and biomedical science. The OD sets overall policy for NIH and coordinates the programs and activities of all NIH components, particularly in areas of research that involve multiple institutes. NIH activities cover a wide range of basic, clinical, and translational research, focused on particular diseases, areas of human health and development, or more fundamental aspects of biology and behavior. Its mission also includes research training and health information collection and dissemination. More than 80% of the NIH budget funds extramural research (i.e., external) through grants, contracts, and other awards. This funding supports research performed by more than 300,000 individuals who work at over 2,500 hospitals, medical schools, universities, and other research institutions around the country. About 10% of the agency's budget supports intramural research (i.e., internal) conducted by nearly 6,000 NIH physicians and scientists, most of whom are located on the NIH campus in Bethesda, Maryland. Funding Sources Funding for NIH comes primarily from annual Labor, HHS, and Education (LHHS) Appropriations Acts, with an additional smaller amount for the Superfund Research Program from the Interior/Environment Appropriations Act. Those two bills provide NIH discretionary budget authority. Through LHHS appropriations, some funding is also transferred to NIH pursuant to the PHS Evaluation Set-Aside or the "PHS Evaluation Tap" transfer authority. Authorized by Section 241 of the Public Health Service Act, the evaluation tap allows the Secretary of HHS, with the approval of appropriators, to redistribute a portion of eligible PHS agency appropriations across HHS for program evaluation and implementation purposes. The PHSA section limits the set-aside to not less than 0.2% and not more than 1% of eligible program appropriations. However, LHHS Appropriations Acts have commonly established a higher maximum percentage for the set-aside and have distributed specific amounts of "tap" funding to selected HHS programs. Since FY2010, and including in FY2020, this higher maximum set-aside level has been 2.5% of eligible appropriations. Readers should note that totals in this report and NIH source documents include amounts "transferred in" pursuant to PHS tap but do not include any amounts "transferred out" under this same authority. NIH also receives funding through LHHS appropriations, subject to different budget enforcement rules than the rest of the NIH funding in the actâappropriations to the NIH Innovation Account created by The 21 st Century Cures Act ("the Cures Act," P.L. 114-255 ) to fund programs authorized by the act. For appropriated amounts to the accountâup the limit authorized for each fiscal yearâthe amounts are subtracted from any cost estimate for enforcing discretionary spending limits (i.e., the budget caps). In effect, appropriations to the NIH Innovation Account as authorized by the Cures Act are not subject to discretionary spending limits. The NIH Director may transfer these amounts from the NIH Innovation Account to other NIH accounts, but only for the purposes specified in the Cures Act. If the NIH Director determines that the funds for any of the four Innovation Projects are not necessary, the amounts may be transferred back to the NIH Innovation Account. All amounts authorized by the Cures Act have been fully appropriated to the Innovation Account from FY2017 to FY2020, including $492 million for FY2020. For FY2021, $404 million is authorized to be appropriated. In addition, NIH has received mandatory funding of $150 million annually that is provided in Public Health Service Act (PHSA) Section 330B, for a special program on type 1 diabetes research, most recently extended through FY2020 by the CARES Act ( P.L. 116-136 ), with additional partial-year FY2021 funding of $25,068,493 for October 1, 2020, through November 30, 2020. The total funding available for NIH activities, taking account of add-ons and PHS tap transfers, is referred to as the NIH "program level." FY2020-Enacted Funding The enacted FY2020 NIH program level is made up of the following: $40.228 billion in discretionary LHHS appropriations, including the $492 million authorized for the Cures Act Innovation Account; $1.231 billion pursuant to the PHS program evaluation transfer and a $225 million transfer from the HHS non-recurring expenses fund (NEF); $81 million for the Superfund research program in Interior/Environment appropriations; and $150 million in annual funding for the mandatory type 1 diabetes research program. Accounting for transfers and other adjustments, cited FY2021 budget documents from the Administration show the NIH FY2020 program level as $41.685 billion. Coronavirus Supplemental Appropriations NIH has also received emergency supplemental appropriations to several IC accounts as provided by the first and third, coronavirus supplemental appropriations acts, shown in Table 1 , totaling $1.8 billion. In addition to these appropriations, the fourth coronavirus supplemental required that a total of not less than $1.8 billion of $25 billion appropriated to the Public Health and Social Services Emergency Fund be transferred to two NIH institutes and the Office of the Director. When accounting for these transfers, total funding directed to the NIH would come to not less than $3.6 billion across the three actsâan 8.6% funding increase over regular enacted FY2020 appropriations. These acts also include various other transfer authorities that would allow for additional transfers to and from NIH accounts (explained in the table notes). By convention, CRS does not add amounts provided as an emergency requirement to the NIH program levels in the remainder of this report. The FY2020 regular and emergency appropriations amounts are presented separately. FY2021 Budget and Appropriations President Trump's FY2021 initial budget request (February 10, 2020) proposed that NIH be provided with a total program level of $38.694 billion, a decrease of $2.99 billion (-7.2%) from FY2020-enacted levels. The proposed FY2020 program level would have been made up of $37.630 billion in LHHS appropriations, including the $404 million for the Cures Act Innovation Account (the full amount authorized for FY2021); $741 million in transfers to NIH pursuant to the PHS Evaluation Tap authority; $74 million for the Superfund Research Program in Interior/Environment appropriations; and $150 million in proposed annual funding for the mandatory type 1 diabetes program. Under the request, all existing IC accounts would receive a decrease compared to FY2020-enacted levels (see Appendix A ). The Building and Facilities account would receive an increase in LHHS budget authority, from $200 million in FY2020 to $300 million in FY2021. Subsequently, on March 17, 2020, the Office of Management and Budget submitted an amendment to President Trump's original request that would increase funding for the National Institute of Allergy and Infectious Disease (NIAID) by $440 million relative to the original request. The purpose of this additional requested funding was "to ensure [NIAID] has the resources beginning October 1, 2020, to continue critical basic and applied research on coronaviruses and other infectious diseases." This amendment to the original proposal, if enacted, would result in NIAID receiving an increase of $9.3 million above the FY2020 level. Taking into account this amendment, as of the date of this report, the FY2021 budget request would provide NIH with a total program level of $39.133 billion, a decrease of $2.55 billion (-6.1%) from FY2020-enacted levels, with a total of $38.811 billion by provided by LHHS appropriations. In addition, the FY2021 budget request proposes consolidating the Agency for Healthcare Research and Quality (AHRQ) into NIH, forming a 28 th ICâthe National Institute for Research on Safety and Quality (NIRSQ). The creation of a new NIH institute would require amendments to the PHSA, especially Section 401(d), which specifies that "[i]n the National Institutes of Health, the number of national research institutes and national centers may not exceed a total of 27." Under the FY2021 request, NISRQ would receive a total appropriation of $355.112 million, including $256.66 million in discretionary LHHS budget authority and $98.452 million in mandatory appropriations from the Patient-Centered Outcomes Research Trust Fund (PCORTF) in Social Security Act Section 1181. Congress did not adopt the Administration's similar proposals to consolidate AHRQ into NIH as NIRSQ in FY2018 through FY2020. The budget request proposes select specified FY2021 funding levels for programs and activities within and across the NIH accounts based on the Administration's research priorities, as summarized in Table A-3 . If adopted, these funding levels would likely be specified in report and/or explanatory statement language accompanying LHHS appropriations bills. For the most part, Congress does not specify NIH funding for particular diseases or areas of research, instead allowing the ICs to award funding within their mission areas. Funding awards are generally made on a competitive basis through various funding mechanisms intended to balance scientific opportunity with health priorities. Trends Table 2 outlines NIH program level funding over the previous 25 years; Figure 1 illustrates funding trends in both current (also called nominal dollars) and projected constant (i.e., inflation-adjusted) FY2021 dollars (funding shown is total budget authority). NIH has seen periods of high and low funding growth. Between FY1994 and FY1998, funding for NIH grew from $11.0 billion to $13.7 billion (nominal dollars). Over the next five years, Congress and the President doubled the NIH budget to $27.2 billion in FY2003. In each of FY1999 through FY2003, NIH received annual funding increases of 14% to 16%. From FY2003 to FY2015, NIH funding increased more gradually in nominal dollars. In some years, (FY2006, FY2011, and FY2013) funding for the agency decreased in nominal dollars. From FY2016 through FY2020, NIH has seen funding increases of over 5% each year. The largest increase was from FY2017 to FY2018, where the program level increased by $3.0 billion (+8.7%), making this the largest single-year nominal dollar increase since FY2003. The lower half of Figure 1 shows NIH funding adjusted for inflation (in projected constant FY2021 dollars) using the Biomedical Research and Development Price Index (BRDPI). It shows that the purchasing power of NIH funding peaked in FY2003 (the last year of the five-year doubling period) and then declined fairly steadily for more than a decade until back-to-back funding increases were provided in each of FY2016 through FY2020. The FY2021 budget request would provide a program level that is 13.0% below the peak FY2003 program level. Appendix A. NIH Funding Details Program-Specific Funding In recent years, Congress and the President have increasingly specified funding levels for programs or research areas within NIH accounts throughout the budget and appropriations process. Congress uses language in reports and explanatory statements accompanying appropriations bills to designate funding for specified purposes. The Administration requests NIH program-specific funding, as outlined in the HHS and NIH budget request documents. For the most part, Congress does not specify NIH funding for particular diseases or areas of research, instead allowing the ICs to award funding within their mission areas. Funding is generally awarded on a competitive basis through various funding mechanisms intended to balance scientific opportunity with health priorities. In FY2020, Congress used explanatory statement language to specify a certain amount of IC funding for designated purposes, as summarized in Table A-2 . Sometimes the language specifies that "no less than" a certain amount can be designated for a certain purpose; in other cases, language "provides" or "recommends" that an amount be spent on a certain purpose. For FY2020, while the House report ( H.Rept. 116-62 ) also included funding levels for some of the below programs, the amounts in the explanatory statement supersede those. Both the explanatory statement and the House report include many additional statements directing the agency to prioritize certain programs or areas of research, as well as expressing the opinion or concerns of Congress regarding NIH; these broad statements are not summarized here. Appendix B. Acronyms and Abbreviations


NNSA Faces Challenges in Executing Ongoing and Planned Weapon Programs and Related Capital Asset Projects to Modernize the Nuclear Stockpile NNSA is executing and plans to carry out multiple weapon programs and a range of related capital asset projects over the next 2 decades. First, NNSA is currently conducting four weapon modernization programs: the B61-12 LEP, the W88 Alteration 370, the W80-4 LEP, and the W87-1 Modification program. Table 1 provides more information on each of these programs based on our prior work, with selected updates on program schedules, cost estimates, and budgets from the Fiscal Year 2020 Stockpile Stewardship and Management Plan and NNSA testimony. In addition to these four ongoing programs, the 2018 Nuclear Posture Review calls for NNSA to consider additional weapon programs— specifically, a program to develop a modern nuclear-armed sea-launched cruise missile, and another to develop a new submarine-launched ballistic missile warhead (now being referred to as the W93). The Nuclear Posture Review also instructs NNSA to maintain the B83-1 bomb until a suitable replacement can be found. To support and enable ongoing and planned weapon programs, NNSA also plans to spend billions of dollars over the next 2 decades on capital asset projects and other infrastructure risk reduction and recapitalization efforts to modernize the production infrastructure NNSA uses to produce components and materials needed for its weapon programs. Table 2 provides more information on selected NNSA capital asset projects discussed in our recent reports, with selected updates on program schedules and cost estimates from the DOE Office of Project Management’s January 2020 Monthly DOE Project Portfolio Status Report. According to NNSA’s plans, the agency must carry out many of its weapon programs while simultaneously modernizing the very infrastructure on which these weapon programs rely for components and other materials. Therefore, any delays or technical challenges that affect NNSA’s plans for its production facilities may be expected to result in delays and challenges to the weapon programs. Figure 1 shows the estimated schedules for the weapon programs and related capital asset projects described in tables 1 and 2 and reported on in our prior work, with updated information as presented in the Fiscal Year 2020 Stockpile Stewardship and Management Plan. We have reported on the potential effects on NNSA’s weapon programs of delays or technical challenges in modernizing its production facilities. For example: The W87-1 Modification program’s schedule may be particularly vulnerable to production challenges, including pit production challenges, because, as we reported in November 2018, it will require all newly-made components, including pits. In our most recent report on the W87-1 program, a classified report issued in February 2020, we found that NNSA’s past challenges in managing plutonium activities at Los Alamos and in executing projects of this size cast doubt on NNSA’s ability to produce 80 pits per year in 2030. As we note in that report, an independent assessment of NNSA’s pit production strategy in March 2019 concluded that no options evaluated by NNSA could be expected to produce 80 pits per year by 2030. The independent assessment further stated that NNSA had no precedent for major projects costing more than $700 million dollars that had been completed in fewer than 16 years, and that many similar projects were eventually cancelled. Future weapon programs will require newly produced explosives, including some that NNSA has not produced at scale since 1993. As we reported in June 2019, NNSA officials stated that producing these materials will pose challenges that include replicating decades-old recipes for the materials and preparing for their full-scale production in aging facilities. As we noted in that report, similar problems restarting dormant production capabilities have delayed past weapon programs—notably, the W76-1 LEP, which NNSA completed in December 2018. As we reported in March 2009, NNSA had to delay first production of the W76-1 from September 2007 to September 2008 when it encountered problems restarting production of a key material, known as Fogbank. NNSA is working to reconstitute its high explosives capabilities, as we reported in June 2019. Nonnuclear parts and components comprise over 80 percent of the items in a nuclear weapon, and NNSA’s Kansas City National Security Campus procures or produces most of these. In April 2019, we found that work on the B61-12 LEP and W88 Alteration 370 was expected to double at the Kansas City site during fiscal years 2020 through 2022. Our April 2019 report also identified challenges that could complicate work at the site. For example, disruption to the established supply chain for externally supplied parts—which comprise about 65 percent of the nonnuclear parts used at the Kansas City site—could result in production delays, and the site needs hundreds of thousands of additional square feet of manufacturing space to meet workload demands. We have also recently completed work in which we reported on challenges integrating the schedules of NNSA’s weapon programs with the schedules for DOD’s modernized delivery systems. For example, the W87-1 warhead will need to be integrated on a delivery system that is under development, an intercontinental ballistic missile known as the Ground-Based Strategic Deterrent. We have ongoing work examining DOD and DOE plans to modernize and integrate warheads and delivery vehicles and expect to issue a classified report in spring 2020. NNSA Has Taken Steps to Improve Its Management of Weapon Programs and Enabling Capital Asset Projects, but Additional Improvements Are Needed As we have recently reported, NNSA has made improvements in its management of some weapon modernization programs and enabling capital asset projects. We have concluded that NNSA’s federal program and project management capacity is improving, as are the controls it has developed for program and project performance. For example: We found in January 2018 that NNSA has established and strengthened management requirements for LEPs. Specifically, in January 2016, NNSA’s Office of Defense Programs issued a program management directive that designates risk-based program execution requirements that all programs must follow. The directive places LEPs in one of the highest-risk categories, meaning these programs are required to apply more rigorous management controls specified in the directive, including using earned value management. Further, in January 2017, NNSA issued two directives implementing requirements for NNSA’s Office of Cost Estimating and Program Evaluation to conduct independent cost estimates. In May 2018, we found that the program cost estimate for the B61-12 LEP substantially met the criteria for all four characteristics of a high-quality, reliable cost estimate, in part because it was the first LEP to undergo an independent cost estimate. We reported in our February 2017 high-risk update that DOE demonstrated a strong commitment and top leadership support for improving project management. For example, DOE made changes to its revised project management order, issued in May 2016, in response to recommendations we made in prior years, such as requiring that projects develop cost estimates and analyses of alternatives according to best practices we identified. In September 2017, we found that NNSA had made progress in developing a revised scope of work, cost estimate, and schedule for the Uranium Processing Facility project, which is to modernize uranium production efforts at the Y-12 National Security Complex. We reported at that time that these improvements may help NNSA stabilize escalating project costs and technical risks experienced under the previous strategy. In November 2017, we found that NNSA had established programs to manage strategic materials—specifically, uranium, plutonium, tritium, and lithium—and had defined requirements and managerial roles for program managers. Since that time, NNSA has taken steps to implement a new enterprise-wide approach for managing explosives activities, as we found in our June 2019 report on those activities. However, we have identified additional actions NNSA could take to further improve its management of weapon modernization programs and related projects. As NNSA’s workload increases, additional management rigor will help ensure that programs and projects are executed consistent with cost and schedule estimates, and that risk is effectively managed and communicated. For example: We found in our January 2018 report that NNSA had not adopted the best practice of having an independent team validate its earned value management systems against the national standard for such systems, which could help the agency better manage risk in its LEPs. We also found that NNSA had not established specific benchmarks for technology readiness at LEP decision points, consistent with best practices. We recommended that NNSA require an independent team to validate contractor earned value management systems for LEPs and establish technology readiness requirements at LEP decision points. According to an update NNSA provided to us in September 2019, the agency has not taken action to address these recommendations. We continue to believe that it should do so. We found in our September 2017 report that NNSA had not developed a complete scope of work, a life-cycle cost estimate, or an integrated master schedule for its overall uranium program—of which the Uranium Processing Facility is only one part—and had no time frame for doing so. We recommended that NNSA should set a time frame for when the agency would develop a complete scope of work, a life-cycle cost estimate, and an integrated master schedule for the overall uranium program. NNSA generally agreed with our recommendation and has taken actions to respond to it. We expect to issue a report on the Uranium Processing Facility and NNSA’s plans for its uranium program in March 2020. As we reported in February 2020, the plutonium program has begun to develop a schedule for pit production. However, NNSA allows strategic materials programs such as the plutonium program to tailor their approach to developing schedules and does not require that they meet best practices for schedule estimating. We recommended that NNSA ensure that the plutonium program develop a schedule for pit production consistent with best practices for schedule development. NNSA agreed with our recommendation. Our ongoing work includes reviews of NNSA’s management of other efforts essential to ongoing weapon modernization programs, such as the production of radiation-hardened microelectronics at Sandia National Laboratories in New Mexico and of depleted uranium at the Y-12 National Security Complex in Tennessee. NNSA Needs a Portfolio-based Approach to Managing Its Weapon Modernization Programs and Related Efforts NNSA’s weapon modernization programs and enabling infrastructure efforts have significant interdependencies that require integrated management across the portfolio of programs to effectively manage cost, schedule, and risk. Portfolio management best practices developed by the Project Management Institute state that organizations can optimize their portfolios of programs and projects by assessing their capability and capacity to finance specific portfolio components; determining which portfolio components should receive the highest priority; and identifying components to be suspended, reprioritized, or terminated. In our April 2017 report on NNSA’s budget materials and modernization plans, we found that NNSA did not clearly identify the extent to which its long-range budget estimates for its overall modernization program fell short of specific annual budget requests anticipated in this plan. We concluded that NNSA had not addressed the projected bow wave of future funding needs and the mismatch between those needs and the potential funding available in the years in question. By not addressing the risks associated with the potential funding shortfall, we concluded, NNSA raised questions about its ability to achieve its modernization program goals at cost and on schedule. As a result, as discussed above, we recommended that NNSA include an assessment of the affordability of its portfolio of modernization programs in future versions of the Stockpile Stewardship and Management Plan—for example, by presenting options NNSA could consider to bring its estimates of modernization funding needs into alignment with potential future budgets, such as potentially deferring the start of or canceling specific modernization programs. NNSA did not explicitly agree or disagree with our recommendation. The President’s fiscal year 2021 budget request for NNSA indicates that the bow wave has arrived, requesting an increase of about $3.1 billion over the funding enacted for Weapons Activities in fiscal year 2020—a year-to-year increase of over 25 percent. The Fiscal Year 2020 Stockpile Stewardship and Management Plan, issued in July 2019, includes a new section on affordability analysis and states that the section was added in response to our April 2017 recommendation. However, our review of this section indicates that it does not fully respond to our recommendation because it does not provide information about how potential misalignment between NNSA’s modernization budget estimates and projections of the President’s modernization budgets may be addressed, or about the potential impacts of adjusting program schedules or cost or schedule overruns. Since the issuance of the 2018 Nuclear Posture Review, NNSA’s portfolio of planned programs has only grown more extensive and complex. We continue to believe that NNSA, by assessing its portfolio of modernization programs in future versions of the Stockpile Stewardship and Management Plan—for example, by presenting options NNSA could consider to bring its estimates of modernization funding needs into alignment with potential future budgets, such as potentially deferring the start of or canceling specific modernization programs—could help congressional and NNSA decision makers better understand NNSA’s priorities and trade-offs that it may need to undertake in the future, depending on funding and program performance. Chairman Cooper, Ranking Member Turner, and Members of the Subcommittee, this completes my prepared statement. I would be pleased to respond to any questions you may have at this time. GAO Contact and Staff Acknowledgments If you or your staff members have any questions about this testimony, please contact me at (202) 512-3841 or bawdena@gao.gov. Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this statement. GAO staff who made key contributions to this testimony are Jason Holliday, Assistant Director; Antoinette C. Capaccio; Julia Coulter; Rob Grace; John Hocker; Dan Royer; and Kiki Theodoropoulos. Related GAO Products The following is a selection of GAO’s recent work assessing the National Nuclear Security Administration’s management of nuclear weapon programs and related capital asset projects: Nuclear Weapons: NNSA Should Further Develop Cost, Schedule, and Risk Information for the W87-1 Warhead Program. GAO-20-207C. Washington, D.C.: February 28, 2020. Nuclear Weapons Sustainment: Improvements Made to Budget Estimates in Fiscal Year 2019 Joint Report, but Opportunities Remain to Enhance Completeness. GAO-20-37R. Washington, D.C.: November 7, 2019. Nuclear Weapons: Additional Actions Could Help Improve Management of Activities Involving Explosive Materials. GAO-19-449. Washington, D.C.: June 17, 2019. Modernizing the Nuclear Security Enterprise: NNSA Is Taking Action to Manage Increased Workload at Kansas City National Security Campus. GAO-19-126. Washington, D.C.: April 12, 2019. High-Risk Series: Substantial Efforts Needed to Achieve Greater Progress on High-Risk Areas. GAO-19-157SP. Washington, D.C.: March 6, 2019. Nuclear Weapons: NNSA Has Taken Steps to Prepare to Restart a Program to Replace the W78 Warhead Capability. GAO-19-84. Washington, D.C.: November 30, 2018. B61-12 Nuclear Bomb: Cost Estimate for Life Extension Incorporated Best Practices, and Steps Being Taken to Manage Remaining Program Risks. GAO-18-456. Washington, D.C.: May 31, 2018. Nuclear Weapons: NNSA Should Clarify Long-Term Uranium Enrichment Mission Needs and Improve Technology Cost Estimates. GAO-18-126. Washington, D.C.: February 16, 2018. Nuclear Weapons: NNSA Should Adopt Additional Best Practices to Better Manage Risk for Life Extension Programs. GAO-18-129. Washington, D.C.: January 30, 2018. Nuclear Weapons: NNSA Needs to Determine Critical Skills and Competencies for Its Strategic Materials Programs. GAO-18-99. Washington, D.C.: November 14, 2017. Modernizing the Nuclear Security Enterprise: A Complete Scope of Work Is Needed to Develop Timely Cost and Schedule Information for the Uranium Program. GAO-17-577. Washington, D.C.: September 8, 2017. National Nuclear Security Administration: Action Needed to Address Affordability of Nuclear Modernization Programs. GAO-17-341. Washington, D.C.: April 26, 2017. High-Risk Series: Progress on Many High-Risk Areas, While Substantial Efforts Needed on Others. GAO-17-317. Washington, D.C.: February 15, 2017. DOE Project Management: NNSA Needs to Clarify Requirements for Its Plutonium Analysis Project at Los Alamos. GAO-16-585. Washington, D.C.: August 9, 2016. DOE Project Management: NNSA Should Ensure Equal Consideration of Alternatives for Lithium Production. GAO-15-525. Washington, D.C.: July 13, 2015. Nuclear Weapons: NNSA and DOD Need to More Effectively Manage the Stockpile Life Extension Program. GAO-09-385. Washington, D.C.: March 2, 2009. GAO Cost Estimating and Assessment Guide: Best Practices for Developing and Managing Capital Program Costs. GAO-09-3SP. Washington, D.C.: March 2009. Nuclear Weapons: Opportunities Exist to Improve the Budgeting, Cost Accounting, and Management Associated with the Stockpile Life Extension Program. GAO-03-583. Washington, D.C.: July 28, 2003. This is a work of the U.S. government and is not subject to copyright protection in the United States. The published product may be reproduced and distributed in its entirety without further permission from GAO. However, because this work may contain copyrighted images or other material, permission from the copyright holder may be necessary if you wish to reproduce this material separately.


Number of NIV Adjudications and Refusal Rates Increased From Fiscal Years 2012 Through 2016, and Declined in Fiscal Year 2017 NIV Adjudications Increased Annually from Fiscal Years 2012 through 2016 and Declined in Fiscal Year 2017 We reported in August 2018 that the total number of NIV applications that consular officers adjudicated (NIV adjudications) annually peaked at about 13.4 million in fiscal year 2016, which was an increase of approximately 30 percent since fiscal year 2012. In fiscal year 2017 (the most recent data available at the time of our report), NIV adjudications decreased by about 880,000 adjudications, or about 7 percent. Figure 2 shows the number of applications adjudicated each year from fiscal years 2012 through 2017. Most NIV Applications Refused from Fiscal Years 2012 through 2017 Were for Reasons Other than Terrorism and Other Security-Related Concerns As shown in figure 2, the percentage of NIVs refused—known as the refusal rate—increased from fiscal years 2012 through 2016, and was about the same in fiscal year 2017 as the previous year. The NIV refusal rate rose from about 14 percent in fiscal year 2012 to about 22 percent in fiscal year 2016, and remained about the same in fiscal year 2017; averaging about 18 percent over the time period. The total number of NIVs issued peaked in fiscal year 2015 at about 10.89 million, before falling in fiscal years 2016 and 2017 to 10.38 million and 9.68 million, respectively. According to State data, while the majority of NIV refusals from fiscal years 2012 through 2017 were a result of consular officers finding the applicants ineligible, a relatively small number of refusals were due to terrorism and other security-related concerns. State data indicate that more than 90 percent of NIVs refused each year from fiscal years 2012 through 2017 were based on the consular officers’ determination that the applicants were ineligible nonimmigrants—in other words, the consular officers believed that the applicant was an intending immigrant seeking to stay permanently in the United States, which would generally violate NIV conditions, or that the applicant otherwise failed to demonstrate eligibility for the particular visa he or she was seeking. For example, an applicant applying for a student visa could be refused as an ineligible nonimmigrant for failure to demonstrate possession of sufficient funds to cover his or her educational expenses, as required. As we reported in August 2018, our analysis of State data indicates that relatively few applicants— approximately 0.05 percent—were refused for terrorism and other security-related reasons from fiscal years 2012 through 2017. As shown in figure 3, in fiscal year 2017, State data indicate that 1,256 refusals (or 0.05 percent) were based on terrorism and other security-related concerns, of which 357 refusals were specifically for terrorism-related reasons. Executive Actions Taken in Calendar Year 2017 Introduced New Visa Entry Restrictions and Requirements to Enhance Screening and Vetting, Including for NIVs The President issued Executive Order 13769, Protecting the Nation from Foreign Terrorist Entry Into the United States (EO-1), in January 2017. In March 2017, the President revoked and replaced EO-1 with the issuance of Executive Order 13780 (EO-2), which had the same title as EO-1. Among other things, EO-2 suspended entry of certain foreign nationals for a 90-day period, subject to exceptions and waivers. In September 2017, as a result of the reviews undertaken pursuant to EO-2, the President issued Presidential Proclamation 9645, Enhancing Vetting Capabilities and Processes for Detecting Attempted Entry into the United States by Terrorists or Other Public-Safety Threats (Proclamation), which imposes certain conditional restrictions and limitations on the entry of nationals of eight countries—Chad, Iran, Libya, North Korea, Somalia, Syria, Venezuela and Yemen—into the United States for an indefinite period. These restrictions, identified in table 1, are to remain in effect until the Secretaries of Homeland Security and State determine that a country provides sufficient information for the United States to assess adequately whether its nationals pose a security or safety threat. Challenges to both EOs and the Proclamation affected their implementation and, while EO-2’s entry restrictions have expired, the indefinite visa entry restrictions outlined in the Proclamation continued to be fully implemented as of our August 2018 report. We reported in August 2018 that our analysis of State data indicates that out of the nearly 2.8 million NIV applications refused in fiscal year 2017, 1,338 were refused due to visa entry restrictions implemented in accordance with the executive actions. To implement the entry restrictions, in March 2017, State directed its consular officers to continue to accept all NIV applications and determine whether the applicant was otherwise eligible for a visa without regard to the applicable EO or Proclamation. If the applicant was ineligible for the visa on grounds unrelated to the executive action, such as having prior immigration violations, the applicant was to be refused on those grounds. If the applicant was otherwise eligible for the visa, but fell within the scope of the nationality-specific visa restrictions implemented pursuant to the applicable EO or Proclamation and was not eligible for a waiver or exception, the consular officer was to refuse the visa and enter a refusal code into State’s NIV database indicating that the applicant was refused solely due to the executive actions. More than 90 percent of the NIV applications refused in fiscal year 2017 pursuant to an executive action were for tourist and business visitor visas, and more than 5 percent were for students and exchange visitors. CBP’s Air Predeparture Programs Interdict High-Risk Air Travelers, but CBP Has Not Fully Assessed the Programs’ Performance CBP Identifies and Interdicts High-Risk Travelers before They Board U.S.-Bound Flights As we reported in January 2017, CBP electronically vets all travelers before they board U.S.-bound flights, and continues to do so until they land at a U.S. port of entry. Through these vetting efforts, CBP seeks to identify high-risk travelers from the millions of individuals who travel to the United States each year. As we reported in January 2017, CBP’s vetting and targeting efforts are primarily conducted by its NTC and entail (1) traveler data matching and analysis, (2) rules-based targeting, and (3) recurrent vetting. Specifically: CBP’s primary method of identifying high-risk individuals is through the comparison of travelers’ information (such as name, date of birth, and gender) against records extracted from U.S. government databases, including the Terrorist Screening Database (TSDB)—the U.S. government’s consolidated terrorist watch list. Traveler data matching focuses on identifying known high-risk individuals—that is, individuals who may be inadmissible to the United States under U.S. immigration law or who may otherwise pose a threat to homeland or national security. CBP’s primary tool for vetting and targeting travelers is the Automated Targeting System (ATS), which is a computer-based enforcement and support system that compares traveler information against intelligence and law enforcement data to identify high-risk travelers. Traveler data matching occurs throughout the travel process and, upon a positive or possible match, CBP officers can select these individuals for further vetting, interviewing, and inspection. CBP’s rules-based targeting efforts seek to identify unknown high-risk travelers—that is, travelers for whom U.S. government entities do not have available derogatory information directly linking them to terrorist activities or any other actions that would make them potentially inadmissible to the United States but who may present a threat and thus warrant additional scrutiny. CBP identifies unknown high-risk individuals by comparing their information against a set of targeting rules based on intelligence, law enforcement, and other information. NTC officials stated that these rules have identified potential high-risk travelers, including potential foreign fighters. Rules-based targeting evaluates travelers during the travel process and, in some cases, in advance of the travel process. If a traveler is a rule “hit,” this individual can be selected for further vetting, interviewing, and inspection. CBP supports its traveler data matching and rules-based targeting efforts through the use of recurrent vetting. NTC’s vetting, targeting, and traveler data matching activities in ATS run 24 hours a day and 7 days a week and automatically scan updated traveler information, when available. This process is to ensure that new information that affects a traveler’s admissibility is identified in near real time. Recurrent vetting occurs throughout the travel process and continues until a traveler arrives at a domestic port of entry. For example, after checking into a foreign airport, a traveler may have his or her visa revoked for a security or immigration-related violation. Due to recurrent vetting, CBP would be alerted to this through ATS and could take action, as appropriate. CBP’s Air Predeparture Programs Interdict High- Risk Travelers on U.S.- Bound Flights, but CBP Has Not Fully Evaluated Overall Effectiveness of These Programs As we reported in January 2017, throughout the travel process, CBP’s predeparture programs use the results of NTC’s efforts to identify and interdict high-risk individuals destined for the United States while they are still overseas; however, we found that CBP had not evaluated the effectiveness of its predeparture programs as a whole, including implementing a system of performance measures and baselines to assess whether the programs are achieving their stated goals. CBP operates three air predeparture programs that are responsible for all U.S.-bound air travelers—(1) Preclearance; (2) the Immigration Advisory Program (IAP) and Joint Security Program (JSP); and (3) the regional carrier liaison groups (RCLG). As we reported in January 2017, CBP data indicated that these programs identified and ultimately interdicted approximately 22,000 high-risk air travelers in fiscal year 2015, the most recent data available at the time of our review. Information on individuals who the NTC identifies through traveler data matching or rules-based targeting, including recurrent vetting, is compiled automatically through ATS into a daily high-priority list (or, traveler referral list). CBP officers at the NTC review the traveler referral list for accuracy and to remove, if possible, any automatically generated matches determined to not be potential high-risk individuals. After this review, CBP officers at the NTC use ATS to send the traveler referral list to officers at each Preclearance, IAP, JSP, and RCLG location, as shown in figure 4. Preclearance. Preclearance locations operate at foreign airports and serve as U.S. ports of entry. Preclearance operations began in 1952 in Toronto to facilitate trade and travel between the United States and Canada. As of March 2018, CBP operated 15 air Preclearance locations in six countries. Through the Preclearance program, uniformed CBP officers at a foreign airport exercise U.S. legal authorities to inspect travelers and luggage and make admissibility determinations prior to an individual boarding a plane to the United States. According to CBP officials, an inspection at a Preclearance location is the same inspection as an individual would undergo at a domestic port of entry, and officers conducting Preclearance inspections exercise the same authority as officers at domestic ports of entry to approve or deny admission into the United States. As a result, travelers arriving at domestic air ports of entry from Preclearance locations do not have to be re-inspected upon entry. According to CBP data, in fiscal year 2015, CBP officers at Preclearance locations determined that 10,648 air travelers were inadmissible out of the approximately 16 million air travelers seeking admission to the United States through a Preclearance location. In addition to requiring that all travelers undergo a primary inspection, CBP officers in these locations also referred almost 290,000 individuals for secondary inspection. Immigration Advisory Program (IAP) and Joint Security Program (JSP). IAP and JSP operated at nine and two foreign airports, respectively, as of January 2017. According to CBP officials, under this program, unarmed, plainclothes CBP officers posted at foreign airports partner with air carriers and host country government officials to help prevent terrorists and other high-risk individuals from boarding U.S.- bound flights by vetting and interviewing them before travel. According to CBP program documentation, CBP established IAP in 2004 to prevent terrorists, high- risk travelers, and improperly documented travelers from boarding airlines destined to the United States. Building on the IAP concept, CBP established JSP in 2009 to partner with host country law enforcement officials to identify high-risk travelers. CBP officers at IAP and JSP locations have the ability to question travelers and review their travel documents. They are to act in an advisory manner to the air carriers and host governments and do not have authority to deny boarding to individuals on U.S.-bound flights or fully inspect travelers or their belongings. IAP and JSP officers are authorized by CBP to make recommendations to airlines as to whether to board or deny boarding (known as a no-board recommendation) to selected travelers based on their likely admissibility status upon arrival to the United States. The final decision to board travelers, however, lies with the carriers. According to CBP data, CBP officers at IAP and JSP locations made 3,925 no-board recommendations in fiscal year 2015 for the approximately 29 million air travelers bound for the United States from such locations. During this same time period, CBP data indicated 1,154 confirmed encounters with individuals in the TSDB, including 106 on the No Fly List. Regional Carrier Liaison Groups (RCLG). RCLGs are located and operate at three domestic airports—Miami International Airport, John F. Kennedy International Airport, and Honolulu International Airport. CBP established RCLGs in 2006 to assist air carriers with questions regarding U.S. admissibility requirements and travel document authenticity. According to CBP officials, RCLGs are responsible for coordinating with air carriers on all actionable referrals from NTC on U.S.-bound travelers departing from an airport without an IAP, JSP, or Preclearance presence. Each RCLG is assigned responsibility for travelers departing out of a specific geographic location. Similar to IAP and JSP, CBP officers in RCLGs also make no-board recommendations, as appropriate, to air carriers. CBP officers at RCLGs do not have authority to make admissibility determinations about U.S.-bound air travelers, and the final decision to board or not board a traveler lies with the carrier. We reported in January 2017 that CBP officers working at the three RCLGs made 7,664 no-board recommendations in fiscal year 2015 for the approximately 59 million travelers bound for the United States from locations within the RCLGs’ spheres of responsibility. During this time period, CBP data indicated that RCLGs also reported 1,634 confirmed encounters with individuals in the TSDB, including 119 on the No Fly List. In January 2017, we reported that CBP had not evaluated the effectiveness of its predeparture programs as a whole, including implementing a system of performance measures and baselines to assess whether the programs were achieving their stated goals. We reported that CBP had taken some initial steps to measure the performance of these programs. Specifically, CBP officials told us that they had collected a large quantity of data and statistics regarding the actions of their predeparture programs and had done so since program inception for all programs. However, due to changes in operational focus, technology updates, and the use of separate data systems at program locations, CBP had not collected consistent data across all of its predeparture programs. As a result, CBP did not have baseline data on which to measure program performance. Therefore, we recommended that CBP develop and implement a system of performance measures and baselines for each program to help ensure that these programs achieve their intended goals. In response, as of March 2018, CBP has developed three performance measures for its predeparture programs. On the basis of our review of CBP documentation, as of December 2018, CBP has collected the fiscal year 2018 data relevant to these measures, used those data to set preliminary targets for fiscal year 2019, and plans to analyze the fiscal year 2019 results and set targets for future fiscal years by October 31, 2019. We will review documentation of CBP’s analysis of the fiscal year 2019 results and future targets, when available, to determine if CBP’s actions address our recommendation. Chairwoman Rice, Chairman Rose, Ranking Members Higgins and Walker, and Members of the Subcommittees, this concludes my prepared statement. I would be pleased to respond to any questions that you may have at this time. GAO Contact and Acknowledgments For further information regarding this testimony, please contact Rebecca Gambler at (202) 512-8777 or gamblerr@gao.gov. In addition, contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this statement. Individuals who made key contributions to this testimony are Kathryn H. Bernet, Assistant Director; Eric Hauswirth; Thomas Lombardi; Sasan J. “Jon” Najmi; Erin O’Brien; and Natalie Swabb. This is a work of the U.S. government and is not subject to copyright protection in the United States. The published product may be reproduced and distributed in its entirety without further permission from GAO. However, because this work may contain copyrighted images or other material, permission from the copyright holder may be necessary if you wish to reproduce this material separately.


O n December 31, 2019, the World Health Organization (WHO) was informed of a cluster of pneumonia cases in Wuhan City, Hubei Province of China. Illnesses have since been linked to a disease caused by a previously unidentified strain of coronavirus, designated Coronavirus Disease 2019, or COVID-19. Despite containment efforts in China, the United States, and elsewhere, by late February there were indications that the COVID-19 outbreak may have entered a new phase, with community spread occurring or suspected in several countries other than China, including in the United States. Diagnostic testing is a critical part of the public health response to and clinical management of the COVID-19 caused by the SARS-CoV-2 virus. Efforts in the United States to develop and disseminate a test for COVID-19 have faced challenges. Manufacturing and quality issues with the nation's testâdeveloped by the Centers for Disease Control and Prevention (CDC)âresulted in essentially all testing going through CDC's laboratory facility in Atlanta through early March, despite distribution of test kits to state and local public health labs beginning in early February. CDC's initial test kits had to be remanufactured and redistributed, which, along with other factors, has significantly delayed access to testing throughout the country. It has been reported that the CDC's Atlanta laboratory is currently under investigation by the Department of Health and Human Services (HHS) for possible quality issues related to its manufacture of the test kits, which may have led to the contamination of one reagent and thus to the quality issues with the test. In this context, on February 29, 2020, in an effort to facilitate the expansion of testing capacity as the first cases of community spread were confirmed in the United States, the Food and Drug Administration (FDA) announced a significant new policy. This policy, issued via agency guidance and effective immediately, allows certain laboratoriesâprincipally clinical and commercial laboratoriesâthat have developed and validated their own COVID-19 diagnostics to begin to use the tests prior to the test receiving an Emergency Use Authorization (EUA) from the agency. Diagnostic testing for COVID-19, in part because it is caused by a novel pathogen, has been led and carried out to date through the country's public health infrastructure. This includes primarily the CDC and the country's network of state and local public health laboratories. In contrast, in most situations, diagnostic testing is carried out by a number of facilities, including private commercial laboratories (e.g., Quest, LabCorp), hospital and other clinical laboratories, and laboratories in academic medical centers, among others. FDA's February 29 guidance aims to facilitate the expansion of diagnostic testing from the public health setting into the clinical health care and commercial settings, leveraging significant standing resources throughout the country, including facilities, trained personnel, expertise, materials, and equipment. It is FDA's intention that this expansion will help the country meet the increasing and substantial demand for testing generated by community spread of the disease and expanded clinical testing guidelines issued by the CDC. In addition, because many cases of COVID-19 are reportedly mild or asymptomatic, widespread access to testingâwhich informs development of important metrics such as the case fatality rateâis critical to understanding the scope and extent of the disease in the United States, and to efficiently directing resources to mitigate its impact in the broader community. Diagnostic testsâformally called in vitro diagnostic (IVD) devicesâmay be commercially developed and distributed as "kits" or developed, validated, and carried out by a single laboratory. This second type of testâknown as a laboratory-developed test, or an LDTâis the more commonly used type of test because of its flexibility and differing federal regulatory requirements, among other reasons. Although the CDC's test is being manufactured as a test kit and initially has been distributed to specific CDC-qualified labs, the FDA guidance targets LDTs that are generally carried out in clinical and academic settings or private commercial laboratories. All clinical laboratories in the United States, regardless of whether they are part of the country's public health infrastructure or part of the health care delivery system, are regulated by the Clinical Laboratory Improvement Amendments of 1988 (CLIA) program, administered by the Centers for Medicare & Medicaid Services (CMS). Federal agencies involved in the regulation of IVDs include FDA and CMS. FDA derives its authority to regulate the sale and distribution of medical devices, such as IVDs, from the Federal Food, Drug, and Cosmetics Act (FFDCA) and the Public Health Service Act (PHSA). CMS's authority to regulate IVDs is through CLIA ( P.L. 100-578 ). FDA regulates the safety and effectiveness of diagnostic tests, as well as the quality of the design and manufacture of the diagnostic test. CMS regulates the quality of clinical laboratories and the clinical testing process. Diagnostic Tests What Are IVD Tests? In vitro diagnostic devices are defined in FDA regulation as a specific subset of medical devices that include "reagents, instruments, and systems intended for use in the diagnosis of disease or other conditions ... in order to cure, mitigate, treat, or prevent disease ... [s]uch products are intended for use in the collection, preparation, and examination of specimens taken from the human body." As indicated by this definition, an IVD may also include components of tests, which can include both non-diagnostic ingredients, called general purpose reagents (GPRs), and the active ingredient in a diagnostic test, referred to as the analyte specific reagent (ASR). In general, an IVD device may be a "commercial test kit" (a product developed, produced, and sold by a manufacturer for distribution to multiple laboratories) or a "laboratory developed test" (a product developed by and used in a single laboratory). LDTs may use components (e.g., general purpose reagents like a buffer) that are either manufactured in-house by the laboratory or commercially developed and distributed. What Is an LDT? A laboratory-developed test is a class of IVD that is designed, manufactured, and used within a single laboratory. LDTs are often used to test for conditions or diseases that are either rapidly changing (e.g., new strains of known infectious diseases) or the subject of quickly advancing scientific research (e.g., genomic testing for cancer). The majority of genetic testsâa type of IVD that analyzes various aspects of an individual's genetic material (e.g., DNA, RNA)âare LDTs. How Are IVD Tests Regulated? In general, oversight of in vitro diagnostic devices focuses on ensuring their safety and effectiveness; their accuracy and reliability; the quality of clinical laboratories that carry out IVD testing; the utility of the information generated by IVDs in clinician and patient decision-making; and the truthfulness of claims made about IVDs that are marketed directly to consumers. As with other medical devices, the application of FDA regulatory requirements to IVDs depends on the IVD's risk classification according to its intended use. Classification is based, in turn, on the risk the device poses to the patient. For IVDs, which are informational tests, the risk to the patient is that of an incorrect test result, either a false positive or a false negative result, either of which may cause serious harm to the individual. In the case of infectious diseasesâfor example, COVID-19âthe risk of a false negative test extends beyond the individual patient into the community at large. The FDA has three classes of medical device: Class I (low risk), Class II (moderate risk), and Class III (high risk). Regulatory controls are dependent on the class of a given medical device. COVID-19 diagnostics would most likely fall in Class III, as they would be considered to be high-risk devices. How Are LDTs Regulated? The regulation of laboratory-developed tests has been the subject of ongoing debate over the past 20 years, driven in large part by an increase in the number and complexity of genetic tests over this time. In general, the FDA has maintained that it has clear regulatory authority over LDTs, as it does with all IVDs that meet the definition of medical device in the FFDCA. However, the FDA traditionally exercised enforcement discretion over LDTsâchoosing not to enforce applicable statutory and regulatory requirements with respect to such testsâmeaning that most of these tests have neither undergone premarket review nor received FDA clearance or approval for marketing. To date, FDA has instead focused its enforcement efforts on commercial IVD kits, which are broadly commercially marketed. In recent years, despite the absence of specific agency guidance on the regulation of LDTs, FDA has nevertheless begun to assert authority over LDTs, and specifically over some direct-to-consumer (DTC) genetic tests, that it considers to be higher-risk tests. What Is CLIA and How Is It Involved in LDT Regulation? CLIA of 1988 provides CMS with authority to regulate clinical laboratories. CLIA establishes quality standards for clinical laboratory testing and a certification program for clinical laboratories that perform testing using IVD devices. All laboratories that perform diagnostic testing for health-related reasons (i.e., with results returned to the patient or a health care practitioner) are regulated by CMS under the authority of CLIA. For CLIA to apply, testing must be carried out on a human specimen. CLIA certification is based on the level of complexity of testing that the laboratory performs, specifically (1) low (therefore, waived) complexity, (2) moderate complexity, and (3) high complexity. FDA is responsible for categorizing tests according to their level of complexity. CLIA requirements are used to evaluate a test's analytical validity , defined as the ability of a test to detect or measure the analyte it is intended to detect or measure. Laboratories that perform moderate- and high-complexity testing must meet specific standards and requirements as a condition of certification, including proficiency testing (PT), patient test management, quality control, personnel qualifications, and quality assurance. All LDTs, including genetic tests offered as LDTs, are considered high-complexity tests under CLIA. All COVID-19 diagnostics would be considered to be high complexity tests under CLIA. How Are IVDs Regulated by the FDA During an Emergency Such as the Outbreak of COVID-19? In certain public health or other emergency situations, the HHS Secretary may declare that existing circumstances justify the use of unapproved medical products for certain uses, or approved medical products for unapproved uses. This declaration facilitates access to not-yet-approved medical products in an expedited manner during certain emergency situations. In the case of the COVID-19 disease, HHS Secretary Azar determined that "there is a public health emergency and [declared] that circumstances exist justifying the authorization of emergency use of in vitro diagnostics for detection and/or diagnosis of the novel coronavirus." On the basis of this declaration, FDA issued an Emergency Use Authorization authorizing the emergency use of the CDC-developed diagnostic test for COVID-19. The FDA also issued an EUA to the state of New York for an LDT developed by the state public health labs. To date, these are the only two EUAs for coronavirus diagnostics that the FDA has issued. How Does the Emergency Use Authority Apply to LDTs if They Are Generally Exempted from Premarket Requirements? During an emergency, all laboratory-developed tests testing for the relevant pathogen (in this case, SARS-CoV-2) must either be approved, cleared, or authorized under an EUA to be legally carried out. As noted above, FDA generally waives most regulatory requirements (e.g., premarket review) for LDTs in normal situations; nevertheless, LDTs may only be used with authorization (e.g., an EUA) during an emergency declaration pursuant to FFDCA Section 564. That is, statutory requirements under FFDCA Section 564 apply to LDTs as they do to other medical products, and they apply to both commercial test kitsâwhich are normally subject to FDA regulatory requirementsâand to LDTs. The EUA process is usually used to expedite access to medical products that would otherwise need premarket approval or clearance in emergency situations. However, because premarket approval requirements for LDTs are generally waived through enforcement discretion by the agency, the EUA represents additional regulatory requirements for the use of an LDT in emergency situations. This is because, among other things, in the case of a communicable disease, the test result has implications beyond the individual being tested, and so a false negative result could have serious consequences for the community. Therefore, FDA states that these tests need an EUA in an emergency prior to clinical use as do other medical products. In contrast, for commercial test kits, the EUA represents an abbreviated mechanism that allows the unapproved product to be used without undergoing the FDA premarket review typically required (for a complex molecular test for a novel pathogen, that review would generally be a Premarket Approval, or PMA, for high-risk medical devices). Despite a request from the Association of Public Health Laboratories (APHL) to FDA, the agency declined to exercise enforcement discretion with respect to LDTs that detect SARC-CoV-2 and diagnose COVID-19 and the requirement that they receive an EUA prior to use. APHL maintains that these labs are regulated by CLIA, and that this regulatory oversight is sufficient. However, on February 29, 2020, FDA announced a new policy allowing certain laboratories that have developed and validated COVID-19 LDTs to begin to use the test clinically prior to it receiving an EUA from the agency but after validation of the test and notification of the agency (see " What Steps Did FDA Take to Expand Testing Capacity in Response to the Problems with CDC's Test? "). The CDC 2019-Novel Coronavirus (2019-nCoV) Real-Time Reverse Transcriptase (RT)-PCR Diagnostic Panel How Does the CDC's COVID-19 Diagnostic Test Work? The diagnostic test developed by the CDC, called the 2019-Novel Coronavirus (2019-nCoV) Real-Time Reverse Transcriptase (RT)-PCR Diagnostic Panel, is a complex molecular diagnostic test that relies on generally standard molecular biology laboratory techniques. Specifically, the test uses a technique called Polymerase Chain Reaction (PCR), a standard in vitro technique for amplification of DNA. Because the SARS-CoV-2 virusâthe virus that causes COVID-19âis an RNA virus, the RNA must be first reverse transcribed to generate copy DNA, or cDNA, which is then amplified (multiple copies are generated) using PCR. PCR relies on primersâvery short single stranded pieces of DNA that are complementary to and bind with specific regions of the viral genome and thus define the specific genomic region to be amplified. The test then relies on a probe, or a single-stranded piece of DNA that is chemically or radioactively labelled, that can bind to and thus detect the amplified target portion of the viral genetic material. CDC's original test used three sets of primers and probes: two to target specific regions of a designated gene within the SARS-CoV-2 viral genome, and a third that was specific to all SARS-like coronaviruses (see " What Quality Problems Did the CDC's Test Experience on Rollout to the State and Local Public Health Laboratories? "). The test also includes a number of authorized control samples, including a positive control for SARS-CoV-2 and a "no template control" to test for system contamination. Together, these controls help ensure that the test is functioning properly. What Type of IVD Is the CDC's Test and Who May Carry It Out? The CDC's test is being developed by the agency as a test kit and is generally authorized to be distributed to state and local public health laboratories to augment public health testing capacity. The test received an EUA from the FDA on February 4, 2020, under which "authorized laboratories" may receive and carry out the test despite the fact that it is not FDA-approved or FDA-cleared, and that it does not meet all related regulatory requirements for marketing. The EUA notes that "[t]esting is limited to qualified laboratories designated by CDC and, in the United States, certified under the Clinical Laboratory Improvement Amendments of 1988 (CLIA), (42 U.S.C. Â§263a), to perform high complexity tests." CDC-qualified laboratories with a CLIA certification for high-complexity testing able to receive the test kits include U.S. state and local public health laboratories, Department of Defense (DOD) laboratories, and select international laboratories. The public health laboratories must verify the test themselves prior to using it, and are currently required to send presumptive positive cases back to the CDC in Atlanta for confirmatory testing by the agency. What Is the Role of the Commercial Manufacturer IDT in the Development and Distribution of the CDC's Test Kit? The Trump Administration had estimated that approximately 1 million tests would be broadly available imminently, facilitated by leveraging manufacturing of the CDC test kit by a private company, Integrated DNA Technologies (IDT), a manufacturer that has been working with CDC. According to HHS Secretary Azar on March 5, 2020, IDT will send the CDC test kit to "hospitals, other labs around the country, commercial, public health â¦ labs" by the end of the week of March 2. The test kit being manufactured by IDT, identical to the CDC test kit and referred to as "IDT 2019-novel coronavirus kit," is being qualified by CDC in lots, and FDA reports that these CDC-qualified, IDT-manufactured test kits are covered by the CDC's EUA authorization of February 4, 2020. FDA notes that if a lab purchases a test kit from IDT, the laboratory does not need its own EUA to carry it out, but that "[t]esting using CDC's EUA-authorized protocol and CDC qualified lots of reagents is considered to be testing done under the CDC's EUA. Labs performing such testing should follow any applicable conditions set forth in the EUA." LabCorp, a large commercial laboratory, is already reporting that it can perform the CDC test "if needed to meet testing demand" and that the test is only for use with "authorized specimens collected from individuals who meet CDC criteria for COVID-19 testing." IDT is manufacturing test kits in two sizes, with the largest having a capacity of 500 reactions (approximately 250 individual patients). What Quality Problems Did the CDC's Test Experience on Rollout to the State and Local Public Health Laboratories? As noted above, the CDC's test kit used three sets of probes and primersâor reagentsâto detect and identify viral DNA beyond that specific to COVID-19. One of these reagents, the one meant to detect any SARS-like coronavirus including SARS-CoV-2, was returning inconclusive results. In response, the CDC validated a new protocol for their test that allows it to be run excluding the faulty reagent, running the test with only the other two diagnostic components. CDC has the authority to modify the test through enforcement discretion granted by FDA. The agency determined that the exclusion of this reagent does not affect the accuracy or the sensitivity and specificity of the test. Certain laboratories have continued to experience problems running the test, even when using the modified protocol, with at least one laboratory reporting that the first reagent was also returning inconclusive results. This problem severely limited the state and local public health laboratories' ability to carry out the CDC's test. In response to these issues, the New York State Department of Health requested and was granted the FDA's second EUA for its own laboratory-developed test, the New York SARS-CoV-2 Real-time RT-PCR Diagnostic Panel. Testing is limited under the EUA to two laboratories in New Yorkâthe Wadsworth Center, New York State Department of Public Health, and the New York City Department of Health and Mental Hygiene, Public Health Laboratories. New York was one of the states that had continued difficulty implementing CDC's original test kit, even with the modified protocol. In response, CDC is also manufacturing new test kits after reportedly resolving the manufacturing issue that affected the original test kit. This time, however, CDC is manufacturing test kits with only the two reagents that were unaffected by the quality issueâthat are specific to SARS-CoV-2âand those kits are being made available to qualified CDC labs through the International Reagent Resource. , These test kits are expected to result in the public health laboratories having capacity to test up to 75,000 patients. Some believe that the CDC's choice to develop and mitigate quality problems with its own COVID-19 diagnostic when an accepted diagnostic was available through the World Health Organization (WHO), which was efficiently distributing a German-developed test globally early in the outbreak, was a decision that cost the United States time in its response to the virus's introduction and spread in the country. Some speculated about the use of the third reagentâthat was to detect SARS-like coronavirusesâand whether it had been strictly necessary if the test was still accurate at diagnosing COVID-19 without that reagent included in the test at all, or if it had instead overcomplicated the test. In general, there have been questions raised about the CDC's handling of the development and distribution of its test, and its response to the quality problems that occurred, and the impact this may have had on the country's ability to detect community spread of the disease before it occurred more widely. What Steps Did FDA Take to Expand Testing Capacity in Response to the Problems with CDC's Test? On February 29, 2020, as problems with the rollout of the CDC-developed diagnostic test continued, FDA announced a new policy to immediately leverage LDTs developed in high-complexity commercial, reference, and clinical laboratories nationwide to expand testing capacity. Specifically, the new agency guidance allows CLIA-certified high-complexity laboratories that have developed and validated their own COVID-19 diagnostics to use the tests while the laboratory is preparing, and FDA is reviewing, their EUA submission. , The FDA guidance states that laboratories have 15 days after validating their test to submit an EUA application to FDA, and the guidance recommends confirming the test's first five negative and positive results against an EUA-authorized diagnostic. According to FDA, it "does not intend to object to the use of these tests for clinical testing while the laboratories are pursuing an EUA with the FDA. Importantly, this policy only applies to laboratories that are certified to perform high-complexity testing consistent with requirements under Clinical Laboratory Improvement Amendments." The guidance includes detailed information about FDA's expected methods for test validation. Pursuant to this FDA guidance, on March 5, 2020, LabCorp announced that it had begun offering its LDT, the LabCorp 2019 Novel Coronavirus (COVID-19), NAA test "for ordering by physicians or other authorized healthcare providers anywhere in the U.S.," and that it is currently pursuing an EUA with the agency for the test. This test is to take between three to four days to return results, and a health care provider must order and authorize it, and obtain the required specimen from the patient. Under the FDA's new guidance, Quest has also announced that it will begin testing for coronavirus with its own LDT, beginning March 9, 2020, and that it plans to pursue an EUA with the agency within 15 days, as required by the guidance.