N
neoconis_ignoramus
Guest
Gotta love the Shrub admin - always putting profits ahead of YOUR
safety. Keep supporting them, dumb**** cons. Right into the shitter.
Funny how terrified conservatards would support an administration that
clearly doesn't care about protecting them from the things they're
terrified of.
Our corrupt conservatard of the day: Jerome Hauer.
Read on, asslicking Bush sycophants. Read on about how your little
crusader and his minions don't care if you die.
http://www.latimes.com/news/nationw...ec02,0,3465779,full.story?coll=la-home-center
America's sole supplier faced oblivion if its rival's product was
adopted. It was time to call on political connections.
By David Willman, Los Angeles Times Staff Writer
December 2, 2007
WASHINGTON -- Shortly after the Sept. 11, 2001, terrorist attacks and
the subsequent anthrax mailings, top U.S. science advisors said the
country "urgently needed" a new, improved anthrax vaccine.
The existing vaccine often caused swollen arms and muscle and joint
pain. Inoculation required six injections over 18 months, followed by
yearly booster shots. The estimated shelf life was just three years.
PDF
In a January 28, 2005 letter to Health and Human Services Secretary
Michael O. Leavitt, Sen. Charles E. Grassley (R-Iowa) raises questions
about a contract with vaccine maker VaxGen.
(Acrobat file)
In a February 25, 2003 letter to the president of BioPort Corp.,
Health and Human Services official Jerome M. Hauer says the government
has decided that a competitor's high-tech anthrax vaccine is "a better
long range option" for the U.S. civilian stockpile.
(Acrobat file)
Related Stories
- Selling the threat of bioterrorism
The scientists' report, issued by the Institute of Medicine, called
for "an anthrax vaccine free of these drawbacks" -- a vaccine that
would require only two or three injections, achieve protection within
30 days, stay potent for a long time and cause fewer adverse
reactions.
Yet nearly six years later, the old vaccine is still the only one
available -- and the government is buying it in mass quantities for
the Strategic National Stockpile.
The manufacturer, Emergent BioSolutions Inc. of Rockville, Md.,
prevailed in a bitter struggle with a rival company that was preparing
what federal health officials expected to be a superior vaccine. The
episode illustrates the clout wielded by well-connected lobbyists over
billions in spending for the Bush administration's anti-terrorism
program.
Emergent's rival, VaxGen Inc. of South San Francisco, had spent four
years developing a new anthrax vaccine and had won an $877.5-million
federal contract to deliver enough doses for 25 million people. The
contract threatened Emergent's very existence. The old vaccine, its
only moneymaker, would likely be obsolete if VaxGen succeeded.
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, a Los Angeles Times
investigation found.
When VaxGen encountered a stubborn scientific problem and needed more
time to deliver its vaccine, the firm found scant support, even among
officials who had earlier backed its efforts. The government then
imposed tougher testing requirements on the struggling company.
A senior federal scientist who oversaw the project said she sought
authority to allow advance payment to VaxGen to help it work through
the difficulties. Top administration officials blocked her requests,
she said.
Finally, a year ago, officials canceled VaxGen's contract, all but
capsizing the company.
Emergent, meanwhile, has won federal contracts worth at least $642
million for the old vaccine and is in line to win many millions more
as the government expands the strategic stockpile.
Kimberly B. Root, a spokeswoman for Emergent (formerly BioPort Corp.),
said the company's lobbying ultimately served the national interest.
"Had we just thrown up our hands, what position would we be in now?"
Root asked. "Where would the government be? There wouldn't be,
potentially, a vaccine in the stockpile."
Bill Hall, a spokesman for the U.S. Department of Health and Human
Services, said VaxGen's "poor performance" sealed its fate. In
canceling the contract, Hall said, officials acted "as effective
custodians of government finances."
Yet Dr. Philip K. Russell, a vaccinologist and retired Army general
who was a senior biodefense official in the Bush administration,
described the outcome as "a big, dramatic failure."
"National security took a back seat to politics and the power of
lawyers and lobbyists," said Russell, who supported the decision to
award VaxGen the contract.
If officials had granted the company a bit more time, Russell said, it
would likely have solved its scientific problem and delivered a
superior vaccine. He noted that setbacks are common in developing
vaccines and said VaxGen appeared capable of overcoming this one.
"It wasn't an insurmountable problem," said Russell, who after leaving
the government did not lobby for or advise either of the competing
vaccine companies. "It was a solvable problem."
Effort to contain threats
On the Sunday night after Sept. 11, 2001, Health and Human Services
Secretary Tommy G. Thompson convened an urgent meeting of health
officials and leading scientists.
"Tommy Thompson was really, really concerned that something could
happen," recalled Dr. Donald A. "D.A." Henderson, a former World
Health Organization physician who led successful efforts to eradicate
smallpox. "There was intelligence information coming through and some
chatter coming through, suggesting there was going to be a second
event, that the second event could very likely be a biologic event.
"And anthrax and smallpox were both raised as possibilities."
The imperative was clear: Find a way to eliminate both threats.
About 10 p.m., as they filed out of HHS headquarters, Henderson and
health department lawyer Stewart Simonson acknowledged their fears.
"I told D.A., 'We're going to make this work.' And he said, 'I just
hope we're not too late,' " Simonson recalled. "That's how scared we
were."
They and other federal officials later scored a victory over one of
the two threats: Working closely with vaccine manufacturers, they
assembled 200 million doses of smallpox vaccine.
Countering anthrax quickly proved to be more complicated.
In October 2001, six envelopes containing powdered anthrax were sent
through the mail on the East Coast, killing five people and sickening
about 20 others. Authorities closed contaminated buildings in
Washington and Florida, and treated hundreds of congressional
employees with antibiotics. No one has been charged in the attacks.
The anthrax mailings showed that the most reliable way to prevent
death is with an antibiotic such as Cipro or doxycycline, administered
quickly and for up to 60 days. Inhaled anthrax otherwise can kill up
to 90% of those infected. The Strategic National Stockpile now holds
enough such antibiotics to treat more than 40 million people.
Dr. Anthony S. Fauci, who directs the National Institute of Allergy
and Infectious Diseases and has advised President Bush and Congress on
U.S. preparedness, said: "We already know that we prevented a serious
problem on the Hill by essentially blanket-treating people with
[Cipro]. We know that because when we went back and did surveys, we
found that many people who had absolutely no symptoms were actually
exposed."
The success in limiting deaths from the 2001 mailings brought into
focus the lack of expert consensus about the magnitude of the anthrax
threat. Some scientists have said that terrorists could disperse
anthrax over a wide area, inflicting casualties on the scale of a
nuclear weapon.
Skeptics, however, note that although anthrax is relatively easy to
obtain and can linger tenaciously on surfaces, it is not contagious
and is difficult to deliver lethally outdoors.
Another attack, Fauci said, "would create massive panic in this
country. It would create economic and other real, logistical problems.
But at the end of the day, you're not going to kill as many people as
you would if you blasted off a couple of car bombs in Times Square."
Nevertheless, fear of a panic-inducing anthrax event generated
momentum for amassing millions of doses of vaccine as a backstop to
the antibiotics that would be the first line of defense.
Bush underscored the threat as he rallied support for the Iraq war. In
an October 2002 speech in Cincinnati, the president told a crowd that
Saddam Hussein's regime had supplies of anthrax and other biological
weapons "capable of killing millions." Such weapons could be easily
deployed, Bush added: "All that might be required are a small
container and one terrorist or Iraqi intelligence operative to deliver
it."
The U.S. already had a military stockpile of anthrax vaccine, filled
with Emergent's product. Now, support grew for creating a civilian
cache, to allow mass inoculations immediately after an attack.
The idea was that a new vaccine -- faster-working, with fewer doses
and fewer side effects -- would protect people who couldn't tolerate
antibiotics and would work against anthrax that withstood antibiotic
treatment. A vaccine might also help protect people reentering a
building that had been contaminated.
In February 2002, the Institute of Medicine released its report,
calling the old vaccine "reasonably safe" but "far from optimal" and
concluding: "A new vaccine, developed according to more modern
principles of vaccinology, is urgently needed."
Officials meeting privately in late 2003 -- including Russell,
Simonson, representatives of the vice president's office, the Centers
for Disease Control and Prevention, the Department of Homeland
Security and Fauci's staff -- decided to push for the purchase of 75
million doses of a new, genetically engineered vaccine.
Dr. Kenneth W. Bernard, then a biodefense advisor to Bush, estimated
that such a stockpile -- providing three doses for 25 million
Americans -- would be enough to respond to simultaneous attacks on New
York, Los Angeles and Washington.
Henderson and Russell said the requirement for 75 million doses was
based as well on a desire to keep a manufacturer operating
continuously, so it could quickly ramp up production in a crisis.
The problem now, both said in recent interviews, is that the nation
has not gotten a newer, better vaccine.
Project BioShield contract
In July 2004, President Bush signed legislation called Project
BioShield, providing $5.6 billion for "next generation" vaccines and
drugs to counter threats of biological terrorism.
VaxGen had been working for two years on its anthrax vaccine, building
on earlier efforts by the Army. VaxGen's early work had impressed
Fauci's staff, which oversaw $100 million in federal research grants
to the company.
Now VaxGen wanted to win the first BioShield contract. The company had
been formed in 1995 by scientists from Genentech Inc., which retained
an ownership stake. Lance K. Gordon, inventor of the first vaccine for
infant meningitis, became VaxGen's chief executive in 2001.
But by 2003, the company's survival was in doubt. It had seen an
experimental AIDS vaccine fail in late-stage testing. And in August
2004, the Nasdaq stock exchange delisted VaxGen for failing to file
timely financial results; the company's stock price sank 35%.
VaxGen sought the BioShield contract by proposing to genetically
engineer an anthrax vaccine with greater purity, more consistent
potency and fewer unwanted side effects than Emergent's old vaccine.
But inside the company's salmon-colored walls facing San Francisco
Bay, technicians were seeing disquieting data: Blood samples drawn
from study patients showed that the vaccine failed to trigger enough
anthrax-fighting antibodies.
VaxGen hired more vaccine experts, including a new chief scientific
officer.
The complication did not deter federal health officials. On Nov. 4,
2004, HHS Secretary Thompson announced that VaxGen had been awarded
the BioShield contract, worth $877.5 million. The money would start to
flow when the company made its first delivery of vaccine, expected in
two years.
"Acquiring a stockpile of this new anthrax vaccine is a key step
toward protecting the American public against another anthrax attack,"
Thompson said.
The announcement was bad news for Emergent, whose vaccine remained the
only revenue generator for its BioPort subsidiary.
"We were worried about it," recalled retired Navy Adm. William J.
Crowe Jr., a former chairman of the Joint Chiefs of Staff who served
on the company's board from 1998 through late 2005. (Crowe was
interviewed at a hospital in Virginia in late August, two months
before his death at age 82.)
BioPort was founded in 1998 by Ibrahim El-Hibri, a Lebanese financier.
Along with Fuad, his U.S.-educated son, El-Hibri formed BioPort by
purchasing vaccine-making facilities of the state of Michigan for
$24.75 million. The company's only product was the anthrax vaccine,
called BioThrax, which it sold chiefly to the U.S. military. In
mid-2004, the company reorganized as Emergent BioSolutions.
To counter the challenge posed by VaxGen, Emergent invested where it
could buy immediate impact: lobbying.
"We had 500 employees who were about to lose their jobs, and we went
out and became advocates for them," said Allen Shofe, a company vice
president who managed its lobbyists.
In 2005, Emergent's yearly spending for lobbying nearly quadrupled, to
$1.41 million. Last year it reached $2.1 million, federal records
show. All told, from 2004 through June 2007, the company used 52
lobbyists at a cost of $5.29 million, the records show.
During the same period, VaxGen spent $720,000 on six lobbyists.
Emergent's lobbyists stressed a core message:
U.S. civilians were at risk of death without an immediately expanded
stockpile of anthrax vaccine;
Emergent stood ready to supply the civilian stockpile, whereas
VaxGen had yet to prove it could deliver a new product;
Emergent might stop making the vaccine if the government chose not
to buy its product for the stockpile.
The company enlisted friendly members of Congress and recruited a
cadre of former government officials to press its attack. Among them
was Jerome M. Hauer, a former acting assistant secretary for emergency
preparedness at HHS.
Hauer had been in the thick of decisions to pursue a new anthrax
vaccine. While at HHS, he told Emergent in a February 2003 letter that
the department had concluded a new vaccine was "a better long-range
option than investing in expanding manufacturing capacity" for
BioThrax. Hauer wrote that "the scientific basis" for a genetically
engineered vaccine was "very sound and will result in an improved
product."
But after leaving the Bush administration in late 2003, Hauer did an
about-face, delivering Emergent as a client to his new boss, the
Fleishman-Hillard public relations and lobbying firm, according to
company records and people familiar with the matter.
At a December 2004 biotech-industry conference, Hauer said the
government should purchase more of the old vaccine. He also took aim
at Simonson, the HHS lawyer, who had succeeded him as assistant
secretary. Hauer said that Simonson should be stripped of his
authority for his handling of the BioShield contract.
In June 2005, Emergent placed Hauer on its board of directors. In that
year and 2006, Emergent paid $360,000 to Fleishman-Hillard, records
show.
In an interview, Hauer said he lobbied members of Congress and advised
the company how to "educate" the administration. He said he changed
his mind about Emergent's vaccine after concluding that he had relied
earlier on "biased information" from his then-colleagues at HHS.
In the spring of 2005, VaxGen became more vulnerable to its rival's
onslaught. VaxGen scientists determined that the problem with the new
vaccine's potency was not the result of a lapse in refrigeration, as
they had first speculated. The difficulty lay with the vaccine's
formula. An aluminum additive, expected to increase potency, had the
opposite effect.
"Our vaccine had a stability problem," said Dr. Marc J. Gurwith, a
scientific executive with VaxGen. "The problem was going to take more
testing to figure out what went wrong and how to fix it."
VaxGen needed patience and flexibility from its presumed allies in
Washington. But Thompson had resigned as HHS secretary, and Emergent's
lobbying had changed the atmosphere. Officials who had backed VaxGen's
drive to deliver a better vaccine were no longer responsive.
"We had a very productive partnership with the government until we
encountered a problem," said Piers Whitehead, VaxGen's vice president
for corporate and business development. "Things deteriorated very
rapidly."
In April 2005, Dr. Noreen A. Hynes took over the HHS office that
oversaw development of new drugs and vaccines under Project BioShield.
Hynes, previously a bioterrorism advisor in the White House, said she
was concerned about whether any small company could shoulder the costs
of developing a new vaccine.
The Project BioShield law allowed advance payments of up to 10% of the
value of a contract. But when she sought permission to grant such
payments, Hynes said, she was turned down.
"I was told that the administration had decided there would be none,"
Hynes said in an interview. Asked who made the decision, Hynes said
that she did not know but that it flowed from "the highest level."
Hynes, an infectious-disease specialist now at Johns Hopkins
University, added: "It was not surprising, frankly, that this new type
of vaccine would have been delayed in development. That's just the way
vaccine development is. . . . It's one of the reasons why you would
want to have the advance-payment authority."
VaxGen officials said they sought advance payment three times in 2005
and 2006: twice in discussions with HHS and once in writing. Hall, the
health department spokesman, said any consideration of such payments
"became moot" because of VaxGen's lack of progress.
Emergent executives knew well the problems inherent in developing and
manufacturing vaccines. The state facilities they acquired in Lansing,
Mich., had been beset with problems. In 1999 and 2000, inspectors from
the Food and Drug Administration found deficiencies in the company's
vaccine, including problems with stability, potency and purity.
The company pledged to rectify the inadequacies -- and the government
stuck with it as the sole supplier of anthrax vaccine to the military.
Now, as Emergent sought to neutralize the competitive threat from
VaxGen, it added to its lobbying team John V. Hishta, who had deep
ties to the Republican congressional leadership.
Hishta was chief of staff to Rep. Thomas M. Davis III (R-Va.) and has
continued to serve him as a campaign advisor. Hishta also directed
national efforts to elect Republicans to the House from 2000 through
2002.
In July 2005, he arranged for an Emergent executive to appear before
the House Government Oversight and Reform Committee, which was chaired
by Davis.
In his opening statement, Davis voiced "concern" that federal
officials had "made insufficient efforts to stockpile existing
countermeasures while new and improved ones are being developed."
The Emergent executive, Robert G. Kramer, told the committee that
health officials were undermining national security by contracting for
VaxGen's product instead of buying more of Emergent's.
"HHS has staked the nation's protection against the No. 1 biologic
threat on an experimental product," Kramer said.
Kramer emphasized that Emergent would reassess whether to keep making
the anthrax vaccine. The company, he said, "finds itself at a critical
juncture in terms of its ability and willingness to commit resources
to a product that lacks a committed customer."
Representatives of VaxGen were not invited to appear.
Asked about his role, Hishta said, "I don't want to comment on my
lobbying work."
Davis did not respond to questions submitted through an aide.
Another key lobbyist for Emergent was Todd A. Boulanger, who had
served as an aide to Republican members of Congress. Boulanger helped
shape a letter by Sen. Charles E. Grassley (R-Iowa) to Thompson's
successor as HHS secretary, pressing him to explain why his department
had not purchased more anthrax vaccine from Emergent.
The selection of VaxGen, Grassley wrote, was "highly suspect." In his
letter, dated Jan. 28, 2005, Grassley told the new secretary, Mike
Leavitt, about "a number of troubling allegations" regarding the
vaccine contract. Grassley suggested that HHS "acted prematurely" in
awarding it to VaxGen. "Some have questioned the effectiveness" of
VaxGen's product, he wrote, noting that the old vaccine "has been
available for use in this country for several decades."
Nine weeks later, Grassley again wrote to Leavitt: "I remain greatly
concerned that the department is not prepared to protect the American
people from an anthrax attack."
Grassley also questioned the independence of Russell, the vaccine
specialist who backed awarding the BioShield contract to VaxGen.
Grassley claimed the former general had been involved in developing
the vaccine years earlier with the Army.
Russell, who left the health department in late 2004, said he had no
financial stake in the vaccine and no role in developing it.
"How do you confront a whisper campaign?" Russell asked. "The
lobbyists have to earn their pay."
Boulanger's role in providing material to Grassley -- including
language for the senator's January 2005 letter -- was described by
people who said they had direct knowledge of his actions. Asked for
comment, Boulanger said, "I'm not going to say anything about my
private conversations with his [Grassley's] staff."
Emergent paid Boulanger's firm, Cassidy & Associates, $300,000 from
2004 to 2006.
A spokeswoman for Grassley, Jill Kozeny, said the senator's letters
were "based on information from a number of sources."
Grassley's intervention hurt VaxGen on two fronts, company executives
said:
Because of his reputation as a fiscal watchdog, his criticism sowed
reticence about VaxGen within Congress and the administration. And the
prospect of overcoming potent political opposition while trying to
solve a tough scientific challenge weakened the resolve of VaxGen's
major investors.
Emergent, meanwhile, broadened its connections to the White House by
hiring Cesar V. Conda and Ron Christie as lobbyists. Both had been
policy aides to Vice President Cheney, who championed Project
BioShield.
According to people familiar with the lobbyists' conversations with
lawmakers, Conda and Christie raised doubts about Simonson's handling
of the vaccine contract, just as Hauer had.
As assistant secretary for emergency preparedness, Simonson could have
made the case within the Bush administration for giving VaxGen an
advance on its contract. But that prospect was dimmed after the
lobbyists' attacks, said Russell.
"Simonson was neutralized," he said.
Simonson, who left the government in mid-2006, declined to comment on
Emergent's lobbying effort.
Neither Conda nor Christie responded to messages seeking comment.
Emergent paid their firm, DC Navigators, $340,000 from 2006 through
June of this year.
One of Emergent's other lobbying firms, McKenna Long & Aldrich, has
taken credit for helping write the Project BioShield law. Seven
members of the McKenna firm subsequently registered to lobby for
Emergent.
From 2005 through June 2007, Emergent paid the firm $380,000.
Government changes rules
VaxGen's contract called for delivery of the first 25 million doses of
vaccine by November 2006.
In May of that year, government health officials extended the deadline
three years.
But they also erected new hurdles: They required VaxGen to complete,
at the company's expense, new testing of the vaccine in animals, plus
an additional study in humans. The original contract had allowed
VaxGen to defer such studies until after the company began receiving
payments.
VaxGen fought without success for better terms, notably partial
payment before delivering the vaccine. It objected to the new
regulatory requirements. It kept at work on the stability problem.
After reviewing VaxGen's progress, the FDA on Nov. 2, 2006, denied
approval to begin the new study in humans, citing concern about
whether the vaccine was stable enough.
On Dec. 19, 2006, the health department canceled VaxGen's contract. By
this fall, VaxGen had laid off 90% of its workforce, which peaked two
years ago at 295 employees, a spokesman said. The company plans to
merge with another Bay Area biotech firm.
In an October report, the Government Accountability Office said that
health officials and VaxGen had been "unrealistic" in believing the
company could deliver its vaccine on schedule. The GAO also said
VaxGen was hindered by regulatory requirements that "were not known"
to the company when the contract was awarded.
VaxGen's Gurwith said in an interview that based on lab results, he
was convinced as of July that the company had figured out how to
maintain the vaccine's stability. Chief executive James P. Panek said
that if the government had stood by VaxGen, it probably would have
delivered a better vaccine "well ahead" of any other manufacturer and
at far lower cost.
Emergent, meanwhile, has continued to win contracts to deliver more of
the old vaccine to the civilian stockpile. In a recent interview, two
senior federal health officials, Gerald W. Parker and Carol D. Linden,
said they remained determined to buy enough vaccine to inoculate 25
million Americans.
Henderson, the Bush administration advisor and former World Health
Organization official, said he was uncertain how much of the old
vaccine should be stockpiled for civilians, considering its
shortcomings.
"All of us were quite persuaded that once you got the [new] vaccine,
you wouldn't be buying the old stuff," he said.
david.willman@latimes.com
Times researchers Janet Lundblad in Los Angeles and Sunny Kaplan in
Washington contributed to this report.
safety. Keep supporting them, dumb**** cons. Right into the shitter.
Funny how terrified conservatards would support an administration that
clearly doesn't care about protecting them from the things they're
terrified of.
Our corrupt conservatard of the day: Jerome Hauer.
Read on, asslicking Bush sycophants. Read on about how your little
crusader and his minions don't care if you die.
http://www.latimes.com/news/nationw...ec02,0,3465779,full.story?coll=la-home-center
America's sole supplier faced oblivion if its rival's product was
adopted. It was time to call on political connections.
By David Willman, Los Angeles Times Staff Writer
December 2, 2007
WASHINGTON -- Shortly after the Sept. 11, 2001, terrorist attacks and
the subsequent anthrax mailings, top U.S. science advisors said the
country "urgently needed" a new, improved anthrax vaccine.
The existing vaccine often caused swollen arms and muscle and joint
pain. Inoculation required six injections over 18 months, followed by
yearly booster shots. The estimated shelf life was just three years.
In a January 28, 2005 letter to Health and Human Services Secretary
Michael O. Leavitt, Sen. Charles E. Grassley (R-Iowa) raises questions
about a contract with vaccine maker VaxGen.
(Acrobat file)
In a February 25, 2003 letter to the president of BioPort Corp.,
Health and Human Services official Jerome M. Hauer says the government
has decided that a competitor's high-tech anthrax vaccine is "a better
long range option" for the U.S. civilian stockpile.
(Acrobat file)
Related Stories
- Selling the threat of bioterrorism
The scientists' report, issued by the Institute of Medicine, called
for "an anthrax vaccine free of these drawbacks" -- a vaccine that
would require only two or three injections, achieve protection within
30 days, stay potent for a long time and cause fewer adverse
reactions.
Yet nearly six years later, the old vaccine is still the only one
available -- and the government is buying it in mass quantities for
the Strategic National Stockpile.
The manufacturer, Emergent BioSolutions Inc. of Rockville, Md.,
prevailed in a bitter struggle with a rival company that was preparing
what federal health officials expected to be a superior vaccine. The
episode illustrates the clout wielded by well-connected lobbyists over
billions in spending for the Bush administration's anti-terrorism
program.
Emergent's rival, VaxGen Inc. of South San Francisco, had spent four
years developing a new anthrax vaccine and had won an $877.5-million
federal contract to deliver enough doses for 25 million people. The
contract threatened Emergent's very existence. The old vaccine, its
only moneymaker, would likely be obsolete if VaxGen succeeded.
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, a Los Angeles Times
investigation found.
When VaxGen encountered a stubborn scientific problem and needed more
time to deliver its vaccine, the firm found scant support, even among
officials who had earlier backed its efforts. The government then
imposed tougher testing requirements on the struggling company.
A senior federal scientist who oversaw the project said she sought
authority to allow advance payment to VaxGen to help it work through
the difficulties. Top administration officials blocked her requests,
she said.
Finally, a year ago, officials canceled VaxGen's contract, all but
capsizing the company.
Emergent, meanwhile, has won federal contracts worth at least $642
million for the old vaccine and is in line to win many millions more
as the government expands the strategic stockpile.
Kimberly B. Root, a spokeswoman for Emergent (formerly BioPort Corp.),
said the company's lobbying ultimately served the national interest.
"Had we just thrown up our hands, what position would we be in now?"
Root asked. "Where would the government be? There wouldn't be,
potentially, a vaccine in the stockpile."
Bill Hall, a spokesman for the U.S. Department of Health and Human
Services, said VaxGen's "poor performance" sealed its fate. In
canceling the contract, Hall said, officials acted "as effective
custodians of government finances."
Yet Dr. Philip K. Russell, a vaccinologist and retired Army general
who was a senior biodefense official in the Bush administration,
described the outcome as "a big, dramatic failure."
"National security took a back seat to politics and the power of
lawyers and lobbyists," said Russell, who supported the decision to
award VaxGen the contract.
If officials had granted the company a bit more time, Russell said, it
would likely have solved its scientific problem and delivered a
superior vaccine. He noted that setbacks are common in developing
vaccines and said VaxGen appeared capable of overcoming this one.
"It wasn't an insurmountable problem," said Russell, who after leaving
the government did not lobby for or advise either of the competing
vaccine companies. "It was a solvable problem."
Effort to contain threats
On the Sunday night after Sept. 11, 2001, Health and Human Services
Secretary Tommy G. Thompson convened an urgent meeting of health
officials and leading scientists.
"Tommy Thompson was really, really concerned that something could
happen," recalled Dr. Donald A. "D.A." Henderson, a former World
Health Organization physician who led successful efforts to eradicate
smallpox. "There was intelligence information coming through and some
chatter coming through, suggesting there was going to be a second
event, that the second event could very likely be a biologic event.
"And anthrax and smallpox were both raised as possibilities."
The imperative was clear: Find a way to eliminate both threats.
About 10 p.m., as they filed out of HHS headquarters, Henderson and
health department lawyer Stewart Simonson acknowledged their fears.
"I told D.A., 'We're going to make this work.' And he said, 'I just
hope we're not too late,' " Simonson recalled. "That's how scared we
were."
They and other federal officials later scored a victory over one of
the two threats: Working closely with vaccine manufacturers, they
assembled 200 million doses of smallpox vaccine.
Countering anthrax quickly proved to be more complicated.
In October 2001, six envelopes containing powdered anthrax were sent
through the mail on the East Coast, killing five people and sickening
about 20 others. Authorities closed contaminated buildings in
Washington and Florida, and treated hundreds of congressional
employees with antibiotics. No one has been charged in the attacks.
The anthrax mailings showed that the most reliable way to prevent
death is with an antibiotic such as Cipro or doxycycline, administered
quickly and for up to 60 days. Inhaled anthrax otherwise can kill up
to 90% of those infected. The Strategic National Stockpile now holds
enough such antibiotics to treat more than 40 million people.
Dr. Anthony S. Fauci, who directs the National Institute of Allergy
and Infectious Diseases and has advised President Bush and Congress on
U.S. preparedness, said: "We already know that we prevented a serious
problem on the Hill by essentially blanket-treating people with
[Cipro]. We know that because when we went back and did surveys, we
found that many people who had absolutely no symptoms were actually
exposed."
The success in limiting deaths from the 2001 mailings brought into
focus the lack of expert consensus about the magnitude of the anthrax
threat. Some scientists have said that terrorists could disperse
anthrax over a wide area, inflicting casualties on the scale of a
nuclear weapon.
Skeptics, however, note that although anthrax is relatively easy to
obtain and can linger tenaciously on surfaces, it is not contagious
and is difficult to deliver lethally outdoors.
Another attack, Fauci said, "would create massive panic in this
country. It would create economic and other real, logistical problems.
But at the end of the day, you're not going to kill as many people as
you would if you blasted off a couple of car bombs in Times Square."
Nevertheless, fear of a panic-inducing anthrax event generated
momentum for amassing millions of doses of vaccine as a backstop to
the antibiotics that would be the first line of defense.
Bush underscored the threat as he rallied support for the Iraq war. In
an October 2002 speech in Cincinnati, the president told a crowd that
Saddam Hussein's regime had supplies of anthrax and other biological
weapons "capable of killing millions." Such weapons could be easily
deployed, Bush added: "All that might be required are a small
container and one terrorist or Iraqi intelligence operative to deliver
it."
The U.S. already had a military stockpile of anthrax vaccine, filled
with Emergent's product. Now, support grew for creating a civilian
cache, to allow mass inoculations immediately after an attack.
The idea was that a new vaccine -- faster-working, with fewer doses
and fewer side effects -- would protect people who couldn't tolerate
antibiotics and would work against anthrax that withstood antibiotic
treatment. A vaccine might also help protect people reentering a
building that had been contaminated.
In February 2002, the Institute of Medicine released its report,
calling the old vaccine "reasonably safe" but "far from optimal" and
concluding: "A new vaccine, developed according to more modern
principles of vaccinology, is urgently needed."
Officials meeting privately in late 2003 -- including Russell,
Simonson, representatives of the vice president's office, the Centers
for Disease Control and Prevention, the Department of Homeland
Security and Fauci's staff -- decided to push for the purchase of 75
million doses of a new, genetically engineered vaccine.
Dr. Kenneth W. Bernard, then a biodefense advisor to Bush, estimated
that such a stockpile -- providing three doses for 25 million
Americans -- would be enough to respond to simultaneous attacks on New
York, Los Angeles and Washington.
Henderson and Russell said the requirement for 75 million doses was
based as well on a desire to keep a manufacturer operating
continuously, so it could quickly ramp up production in a crisis.
The problem now, both said in recent interviews, is that the nation
has not gotten a newer, better vaccine.
Project BioShield contract
In July 2004, President Bush signed legislation called Project
BioShield, providing $5.6 billion for "next generation" vaccines and
drugs to counter threats of biological terrorism.
VaxGen had been working for two years on its anthrax vaccine, building
on earlier efforts by the Army. VaxGen's early work had impressed
Fauci's staff, which oversaw $100 million in federal research grants
to the company.
Now VaxGen wanted to win the first BioShield contract. The company had
been formed in 1995 by scientists from Genentech Inc., which retained
an ownership stake. Lance K. Gordon, inventor of the first vaccine for
infant meningitis, became VaxGen's chief executive in 2001.
But by 2003, the company's survival was in doubt. It had seen an
experimental AIDS vaccine fail in late-stage testing. And in August
2004, the Nasdaq stock exchange delisted VaxGen for failing to file
timely financial results; the company's stock price sank 35%.
VaxGen sought the BioShield contract by proposing to genetically
engineer an anthrax vaccine with greater purity, more consistent
potency and fewer unwanted side effects than Emergent's old vaccine.
But inside the company's salmon-colored walls facing San Francisco
Bay, technicians were seeing disquieting data: Blood samples drawn
from study patients showed that the vaccine failed to trigger enough
anthrax-fighting antibodies.
VaxGen hired more vaccine experts, including a new chief scientific
officer.
The complication did not deter federal health officials. On Nov. 4,
2004, HHS Secretary Thompson announced that VaxGen had been awarded
the BioShield contract, worth $877.5 million. The money would start to
flow when the company made its first delivery of vaccine, expected in
two years.
"Acquiring a stockpile of this new anthrax vaccine is a key step
toward protecting the American public against another anthrax attack,"
Thompson said.
The announcement was bad news for Emergent, whose vaccine remained the
only revenue generator for its BioPort subsidiary.
"We were worried about it," recalled retired Navy Adm. William J.
Crowe Jr., a former chairman of the Joint Chiefs of Staff who served
on the company's board from 1998 through late 2005. (Crowe was
interviewed at a hospital in Virginia in late August, two months
before his death at age 82.)
BioPort was founded in 1998 by Ibrahim El-Hibri, a Lebanese financier.
Along with Fuad, his U.S.-educated son, El-Hibri formed BioPort by
purchasing vaccine-making facilities of the state of Michigan for
$24.75 million. The company's only product was the anthrax vaccine,
called BioThrax, which it sold chiefly to the U.S. military. In
mid-2004, the company reorganized as Emergent BioSolutions.
To counter the challenge posed by VaxGen, Emergent invested where it
could buy immediate impact: lobbying.
"We had 500 employees who were about to lose their jobs, and we went
out and became advocates for them," said Allen Shofe, a company vice
president who managed its lobbyists.
In 2005, Emergent's yearly spending for lobbying nearly quadrupled, to
$1.41 million. Last year it reached $2.1 million, federal records
show. All told, from 2004 through June 2007, the company used 52
lobbyists at a cost of $5.29 million, the records show.
During the same period, VaxGen spent $720,000 on six lobbyists.
Emergent's lobbyists stressed a core message:
U.S. civilians were at risk of death without an immediately expanded
stockpile of anthrax vaccine;
Emergent stood ready to supply the civilian stockpile, whereas
VaxGen had yet to prove it could deliver a new product;
Emergent might stop making the vaccine if the government chose not
to buy its product for the stockpile.
The company enlisted friendly members of Congress and recruited a
cadre of former government officials to press its attack. Among them
was Jerome M. Hauer, a former acting assistant secretary for emergency
preparedness at HHS.
Hauer had been in the thick of decisions to pursue a new anthrax
vaccine. While at HHS, he told Emergent in a February 2003 letter that
the department had concluded a new vaccine was "a better long-range
option than investing in expanding manufacturing capacity" for
BioThrax. Hauer wrote that "the scientific basis" for a genetically
engineered vaccine was "very sound and will result in an improved
product."
But after leaving the Bush administration in late 2003, Hauer did an
about-face, delivering Emergent as a client to his new boss, the
Fleishman-Hillard public relations and lobbying firm, according to
company records and people familiar with the matter.
At a December 2004 biotech-industry conference, Hauer said the
government should purchase more of the old vaccine. He also took aim
at Simonson, the HHS lawyer, who had succeeded him as assistant
secretary. Hauer said that Simonson should be stripped of his
authority for his handling of the BioShield contract.
In June 2005, Emergent placed Hauer on its board of directors. In that
year and 2006, Emergent paid $360,000 to Fleishman-Hillard, records
show.
In an interview, Hauer said he lobbied members of Congress and advised
the company how to "educate" the administration. He said he changed
his mind about Emergent's vaccine after concluding that he had relied
earlier on "biased information" from his then-colleagues at HHS.
In the spring of 2005, VaxGen became more vulnerable to its rival's
onslaught. VaxGen scientists determined that the problem with the new
vaccine's potency was not the result of a lapse in refrigeration, as
they had first speculated. The difficulty lay with the vaccine's
formula. An aluminum additive, expected to increase potency, had the
opposite effect.
"Our vaccine had a stability problem," said Dr. Marc J. Gurwith, a
scientific executive with VaxGen. "The problem was going to take more
testing to figure out what went wrong and how to fix it."
VaxGen needed patience and flexibility from its presumed allies in
Washington. But Thompson had resigned as HHS secretary, and Emergent's
lobbying had changed the atmosphere. Officials who had backed VaxGen's
drive to deliver a better vaccine were no longer responsive.
"We had a very productive partnership with the government until we
encountered a problem," said Piers Whitehead, VaxGen's vice president
for corporate and business development. "Things deteriorated very
rapidly."
In April 2005, Dr. Noreen A. Hynes took over the HHS office that
oversaw development of new drugs and vaccines under Project BioShield.
Hynes, previously a bioterrorism advisor in the White House, said she
was concerned about whether any small company could shoulder the costs
of developing a new vaccine.
The Project BioShield law allowed advance payments of up to 10% of the
value of a contract. But when she sought permission to grant such
payments, Hynes said, she was turned down.
"I was told that the administration had decided there would be none,"
Hynes said in an interview. Asked who made the decision, Hynes said
that she did not know but that it flowed from "the highest level."
Hynes, an infectious-disease specialist now at Johns Hopkins
University, added: "It was not surprising, frankly, that this new type
of vaccine would have been delayed in development. That's just the way
vaccine development is. . . . It's one of the reasons why you would
want to have the advance-payment authority."
VaxGen officials said they sought advance payment three times in 2005
and 2006: twice in discussions with HHS and once in writing. Hall, the
health department spokesman, said any consideration of such payments
"became moot" because of VaxGen's lack of progress.
Emergent executives knew well the problems inherent in developing and
manufacturing vaccines. The state facilities they acquired in Lansing,
Mich., had been beset with problems. In 1999 and 2000, inspectors from
the Food and Drug Administration found deficiencies in the company's
vaccine, including problems with stability, potency and purity.
The company pledged to rectify the inadequacies -- and the government
stuck with it as the sole supplier of anthrax vaccine to the military.
Now, as Emergent sought to neutralize the competitive threat from
VaxGen, it added to its lobbying team John V. Hishta, who had deep
ties to the Republican congressional leadership.
Hishta was chief of staff to Rep. Thomas M. Davis III (R-Va.) and has
continued to serve him as a campaign advisor. Hishta also directed
national efforts to elect Republicans to the House from 2000 through
2002.
In July 2005, he arranged for an Emergent executive to appear before
the House Government Oversight and Reform Committee, which was chaired
by Davis.
In his opening statement, Davis voiced "concern" that federal
officials had "made insufficient efforts to stockpile existing
countermeasures while new and improved ones are being developed."
The Emergent executive, Robert G. Kramer, told the committee that
health officials were undermining national security by contracting for
VaxGen's product instead of buying more of Emergent's.
"HHS has staked the nation's protection against the No. 1 biologic
threat on an experimental product," Kramer said.
Kramer emphasized that Emergent would reassess whether to keep making
the anthrax vaccine. The company, he said, "finds itself at a critical
juncture in terms of its ability and willingness to commit resources
to a product that lacks a committed customer."
Representatives of VaxGen were not invited to appear.
Asked about his role, Hishta said, "I don't want to comment on my
lobbying work."
Davis did not respond to questions submitted through an aide.
Another key lobbyist for Emergent was Todd A. Boulanger, who had
served as an aide to Republican members of Congress. Boulanger helped
shape a letter by Sen. Charles E. Grassley (R-Iowa) to Thompson's
successor as HHS secretary, pressing him to explain why his department
had not purchased more anthrax vaccine from Emergent.
The selection of VaxGen, Grassley wrote, was "highly suspect." In his
letter, dated Jan. 28, 2005, Grassley told the new secretary, Mike
Leavitt, about "a number of troubling allegations" regarding the
vaccine contract. Grassley suggested that HHS "acted prematurely" in
awarding it to VaxGen. "Some have questioned the effectiveness" of
VaxGen's product, he wrote, noting that the old vaccine "has been
available for use in this country for several decades."
Nine weeks later, Grassley again wrote to Leavitt: "I remain greatly
concerned that the department is not prepared to protect the American
people from an anthrax attack."
Grassley also questioned the independence of Russell, the vaccine
specialist who backed awarding the BioShield contract to VaxGen.
Grassley claimed the former general had been involved in developing
the vaccine years earlier with the Army.
Russell, who left the health department in late 2004, said he had no
financial stake in the vaccine and no role in developing it.
"How do you confront a whisper campaign?" Russell asked. "The
lobbyists have to earn their pay."
Boulanger's role in providing material to Grassley -- including
language for the senator's January 2005 letter -- was described by
people who said they had direct knowledge of his actions. Asked for
comment, Boulanger said, "I'm not going to say anything about my
private conversations with his [Grassley's] staff."
Emergent paid Boulanger's firm, Cassidy & Associates, $300,000 from
2004 to 2006.
A spokeswoman for Grassley, Jill Kozeny, said the senator's letters
were "based on information from a number of sources."
Grassley's intervention hurt VaxGen on two fronts, company executives
said:
Because of his reputation as a fiscal watchdog, his criticism sowed
reticence about VaxGen within Congress and the administration. And the
prospect of overcoming potent political opposition while trying to
solve a tough scientific challenge weakened the resolve of VaxGen's
major investors.
Emergent, meanwhile, broadened its connections to the White House by
hiring Cesar V. Conda and Ron Christie as lobbyists. Both had been
policy aides to Vice President Cheney, who championed Project
BioShield.
According to people familiar with the lobbyists' conversations with
lawmakers, Conda and Christie raised doubts about Simonson's handling
of the vaccine contract, just as Hauer had.
As assistant secretary for emergency preparedness, Simonson could have
made the case within the Bush administration for giving VaxGen an
advance on its contract. But that prospect was dimmed after the
lobbyists' attacks, said Russell.
"Simonson was neutralized," he said.
Simonson, who left the government in mid-2006, declined to comment on
Emergent's lobbying effort.
Neither Conda nor Christie responded to messages seeking comment.
Emergent paid their firm, DC Navigators, $340,000 from 2006 through
June of this year.
One of Emergent's other lobbying firms, McKenna Long & Aldrich, has
taken credit for helping write the Project BioShield law. Seven
members of the McKenna firm subsequently registered to lobby for
Emergent.
From 2005 through June 2007, Emergent paid the firm $380,000.
Government changes rules
VaxGen's contract called for delivery of the first 25 million doses of
vaccine by November 2006.
In May of that year, government health officials extended the deadline
three years.
But they also erected new hurdles: They required VaxGen to complete,
at the company's expense, new testing of the vaccine in animals, plus
an additional study in humans. The original contract had allowed
VaxGen to defer such studies until after the company began receiving
payments.
VaxGen fought without success for better terms, notably partial
payment before delivering the vaccine. It objected to the new
regulatory requirements. It kept at work on the stability problem.
After reviewing VaxGen's progress, the FDA on Nov. 2, 2006, denied
approval to begin the new study in humans, citing concern about
whether the vaccine was stable enough.
On Dec. 19, 2006, the health department canceled VaxGen's contract. By
this fall, VaxGen had laid off 90% of its workforce, which peaked two
years ago at 295 employees, a spokesman said. The company plans to
merge with another Bay Area biotech firm.
In an October report, the Government Accountability Office said that
health officials and VaxGen had been "unrealistic" in believing the
company could deliver its vaccine on schedule. The GAO also said
VaxGen was hindered by regulatory requirements that "were not known"
to the company when the contract was awarded.
VaxGen's Gurwith said in an interview that based on lab results, he
was convinced as of July that the company had figured out how to
maintain the vaccine's stability. Chief executive James P. Panek said
that if the government had stood by VaxGen, it probably would have
delivered a better vaccine "well ahead" of any other manufacturer and
at far lower cost.
Emergent, meanwhile, has continued to win contracts to deliver more of
the old vaccine to the civilian stockpile. In a recent interview, two
senior federal health officials, Gerald W. Parker and Carol D. Linden,
said they remained determined to buy enough vaccine to inoculate 25
million Americans.
Henderson, the Bush administration advisor and former World Health
Organization official, said he was uncertain how much of the old
vaccine should be stockpiled for civilians, considering its
shortcomings.
"All of us were quite persuaded that once you got the [new] vaccine,
you wouldn't be buying the old stuff," he said.
david.willman@latimes.com
Times researchers Janet Lundblad in Los Angeles and Sunny Kaplan in
Washington contributed to this report.
