In my last post, we began to play “Follow the Money” to better understand the history of the anthrax vaccine and the current proposal to test the vaccine on children.
Conflicts of Interest-Case Study
Major issues with the anthrax vaccine include safety, conflicts of interest and the lobbying power of the drug developer. I don’t have all the answers, but will outline some of the concerns. Some of these are voiced by ardent vaccine opponents, such as NVIC; others sound more akin to “conspiracy theorists.” A list of safety concerns is presented by two ex-officers in the National Guard. Counterarguments as to safety issues are given by the Institute of Medicine and were outlined in the first part of this series.
Earlier, Steve Salzberg pointed out the conflicts of interest with advisory committee members who receive their funding from government biodefense contracts. But let’s look at the sole manufacturer of the country’s vaccine.
The anthrax vaccine was initially developed by the state of Michigan’s Biologic Products Institute (MBPI). In 1998, the MBPI plant was closed for “renovations” coincidentally following an FDA “notice of intent to revoke licenses”. MBPI was sold in 1998 to for-profit BioPort corporation, which became a subsidiary of Emergent BioSolutions. According to the Department of Defense’s anthrax vaccination website, Emergent is headed by Fuad El-Hibri and Admiral William Crowe, Jr., a former Chairman of the Joint Chiefs of Staff (appointed by President Reagan) and the U.S. ambassador to Britain (1994-1997, appointed by President Clinton). El-Hibri was “CEO of the British company Porton International, which had made a fortune selling anthrax vaccine to countries like Saudi Arabia during the Gulf War.” El-Hibri was not a U.S. citizen at the time and there was reluctance in some quarters to have the government’s sole anthrax vaccine supply controlled by foreign nationals. So Crowe was brought in as director in exchange for about 10% of the company’s stock.
The Corporate Research Project details the bailouts to BioPort to keep the company, the sole manufacturer of anthrax vaccine, viable following considerable regulatory and financial problems.
“BioPort had originally been awarded a $29.4 million DoD contract to supply 8.7 million doses of anthrax vaccine at the price of $4.36 each. But in 1999, the company got a $24.1 million bailout from the DoD. This included an increase in the price per dose from $4.36 to $10.64 and a reduction in the number of doses by about 30 percent. The Pentagon also agreed to advance BioPort $18.7 million to help it cover its debts. The new agreement increased the cost of the contract for the Pentagon to $49.8 million over the following five years. The government has reportedly spent more than $120 million of taxpayers’ money to keep the company afloat.”
Reporter Bob Evans further details BioPort’s financial mismanagement, quoting Congressman Walter Jones, R-N.C., “The message seems clear: If a company wants to make millions without providing a product or service, enter into a sole-source contract with the Department of Defense to produce vaccines…BioPort appears to have the government over a barrel.”
In addition to the financial subsidies, outlined above, concerns have been raised about irregularities in the manufacturing process. Reportedly, on the eve of the Gulf War, the Department of Defense “accelerated and altered the vaccine’s manufacturing process, but without proper regulatory approvals.” “The Government Accountability Office (GAO) reported that the manufacturer “did not notify FDA of a number of changes made in the manufacturing process in the early 1990s and no specific studies were undertaken to confirm that vaccine quality was not affected.” GAO added that the “ingredients used to make vaccine were changed from the original vaccine,” and that “prior to the time of licensing, no human efficacy testing of the … vaccine was performed.” A 2000 Congressional report stated, “use of the current anthrax vaccine for force protection against biological warfare should be considered experimental and undertaken only pursuant to FDA regulations governing investigational testing for a new indication.”
After September 11, 2001, Bioport quickly got its license back, although the FDA had previously found a number of quality control issues in the manufacturing process.
Since then, Emergent BioSolutions has had a lucrative government monopoly and has been aggressive in protecting it. According to the Center for Responsive Politics, Emergent spent more than $3.2 million on lobbying in 2011 alone.
There have also been public relations and “educational” endeavors sponsored by Bioport, though not always advertised as such. The Partnership for Anthrax Vaccination Education, or P.A.V.E., had a website in support of the vaccine, operated by Muhiuddm Haider, a professor at George Washington University. One of PAVE’s regular speakers was Jerome Hauer, former assistant secretary of health and human services for emergency preparedness; there was no disclosure that he was being paid by BioPort.
However, in 2003, while still a government employee HHS, Hauer stated that a “new vaccine was “a better long-range option than investing in expanding manufacturing capacity” for BioThrax…” and that “the scientific basis” for a genetically engineered vaccine was “very sound and will result in an improved product.” Yet as soon as he left, and became a member of BioPort’s board, as well as a lobbyist for them, his assessment changed radically as he changed masters.
Other lobbyists included:
Louis Sullivan, secretary of health and human services under President George H.W. Bush
McKenna Long & Aldridge (MLA), which helped BioPort win a $122.7 million Project Bioshield contract. “MLA had supplied several lawyers, including one who’d helped write the Homeland Security Act of 2002 and two who’d been tapped by Congress for help in creating the BioShield law.”
John Hishta, former executive director of the National Republican Congressional Campaign Committee and former campaign manager for Sen. John Warner (R-Va), influential in Pentagon politics.
A more complete list of lobbyists and spending levels are available from the terrific Center for Responsive Politics here and here. They have a handy list of former Congressmen and a wonderful “revolving door profile.”
These lobbyists have not only helped Emergent BioSolutions secure these seemingly exorbitant government contracts, but have helped ensure that they maintain a monopoly. Their main rival was VaxGen, who had won an $877.5 million federal contract to develop a safer, genetically engineered vaccine. According to an Los Angeles Times investigation, “Fear Inc.,” “Emergent responded by mobilizing more than 50 lobbyists, including former aides to Vice President Dick Cheney, to make the case that relying on the new vaccine was a gamble and that the nation’s safety depended on buying more of Emergent’s product. The company and its allies in Congress ridiculed VaxGen and impugned the competence or motives of officials who supported the new vaccine. The lobbying effort damaged VaxGen’s credibility with members of Congress and the Bush administration.”
Between 2004-2007, Emergent spent $5.29 million on its cadre of lobbyists, while VaxGen spent only $720,000 on six lobbyists. After VaxGen’s contract was cancelled, Emergent had the audacity to claim that their aggressive lobbying was in the country’s interest. Executive Robert G. Kramer admonished the House Government Oversight and Reform Committee, “HHS has staked the nation’s protection against the No. 1 biologic threat on an experimental product.” He further threatened the committee that, should they fund VaxGen, Emergent would have to reconsider its decision to produce the vaccine.
Adding insult to mortal injury, in 2008, Emergent purchased Vaxgen’s recombinant anthrax vaccine technology for a bargain $2 million, given that “more than $250 million was spent to develop it.” And now Emergent has lucrative government contracts for a vaccine with the recombinant protein antigen and a third generation vaccine.
PharmAthene is another Emergent rival and has also had a rocky road, with it’s hopes for a 2008 contract dashed when Biomedical Advanced Research and Development Authority (BARDA) cancelled plans; and Emergent again vastly outspent its rival on lobbying.
Emergent had another reason to aggressively protect its contract. According to the Center for American Progress’ must read report, Getting Rich on Uncle Sucker, Emergent’s cost of production in 2009 was $46 million and profit $217 million—a markup of about 300%.
Also, since the vaccine only has a four year shelf life, Emergent is guaranteed a steady income stream—on the order of $100 million/year—just to replenish the stock.
While Emergent won a grant worth up to $1.25 billion in late 2011—and which was a sole-source contract—its future monopoly is not entirely guaranteed. BARDA is supporting development of next generation recombinant protein antigen (rPA)-based vaccines that will require fewer doses and hopefully have less side effects.
In 2004, President Bush signed Project Bioshield, which earmarked $5.6 billion for new drugs and vaccines to counter bioterrorism. At this point, we seem to have a multi-billion dollar vaccine which has never been shown to be efficacious against inhalational anthrax and was adopted by circumventing usual FDA procedures and despite numerous manufacturing quality issues and safety issues.
And that brings us to the proposed plan for testing the anthrax vaccine in children…Coming up next.
“Molecules to Medicine” banner © Michele Banks
Origami Dollar Heart by Thomas Hawk via flickr
Patriot Act “Fear” image by Matt Colyer
Emergent Biosolutions lobbying data courtesy Center for Responsive Politics
Revolving Door by Dan4th via flickr
Lobbyists by Darin Barry via flickr
K St photo by David Sachs/SEIU via the 99 united on flickr