-Submitted by David Drumm (Nal), Guest Blogger
In 2004 President Bush signed the Project Bioshield Act that authorized $5.6 billion over ten years for “the government to purchase and stockpile vaccines and drugs to fight anthrax, smallpox and other potential agents of bioterror.” The potential use of anthrax as a bioterror weapon is well documented, but smallpox has been eliminated and exists only in ultra-secure labs in Russia and the U.S.
The idea that terrorists are going to break into one of these labs and steal the smallpox virus is absurd. The best defense against this absurd idea is to destroy the remaining stockpiles. However, U.S. Health and Human Services Secretary Kathleen Sibelius said the U.S. and Russian stockpiles would remain in place for at least another five years. There is a reasonable explanation for the U.S. to keep smallpox virus around: to develop a smallpox vaccine against the possibility that Russia weaponizes its stockpile.
Smallpox is caused by the variola virus. According to the FDA, “During the smallpox era, the only known reservoir for the virus was humans; no known animal or insect reservoirs or vectors existed.” That is, any potential threat has to come from the virus in the stockpiles. According to the CDC, “the last naturally occurring case in the world was in Somalia in 1977.”
In 2007, the Bush administration issued a $505 million contract to a Danish company, Bavarian Nordic, to provide twenty million doses of smallpox vaccine for those whose immune system has been compromised. Vaccination is effective within three days of exposure and will remain effective for three to five years with decreasing effectiveness thereafter.
The Obama administration has been pushing a $433 million “sole source” contract to New York based SIGA Technologies Inc who bought the rights to an antiviral drug, ST-246. After complaints from SIGA that negotiations weren’t going to their satisfaction, senior HHS officials replaced the government’s lead contract negotiator, and SIGA was awarded the deal in May. The contract calls for the delivery of 1.7 million doses of the drug to the nation’s biodefense stockpile. The price per dose is $255, yielding a profit of 180%, well above what government specialists consider reasonable.
SIGA’s controlling shareholder is billionaire Ronald O. Perelman. Perelman has made political contributions totaling $620,870, with 40% going to Democrats, 14% going to Republicans, and the balance of 46% going to special interest groups. Perelman donated an additional $50,000 to President Obama’s inauguration.
The effectiveness of this drug on humans is unknown and, for ethical reasons, cannot be tested by exposing humans to the smallpox virus. Dr. Thomas M. Mack, an epidemiologist at USC’s Keck School of Medicine, has called the plan to stockpile SIGA’s drug “a waste of time and a waste of money.”
In addition to the dubious requirement of an untested, short shelf-life, smallpox drug, there’s the problem of getting approval from the FDA. Robert G. Kosko Jr., a manager in the FDA’s antiviral-products division, wrote that there was “no clear regulatory path” for approving antiviral drugs for smallpox — again because of the uncertainty surrounding evidence of effectiveness.
The Animal Efficacy Rule was adopted by the FDA in 2002 to address the problem of testing drugs on humans, when exposing humans to the disease presents ethical problems. However, guidance from the FDA, dated November 2007, on animal models for smallpox states:
Currently, available data do not establish specific preferred, well-characterized animal models for smallpox, and no animal models have been shown to replicate or to predict human responses to therapy for smallpox.
An FDA antiviral drug advisory committee will meet on December 14-15, 2011, to discuss “pathways for the development of drugs intended to treat variola virus infection (smallpox) in the event of an outbreak, including the use of animal models of other orthopoxviruses (the group of viruses that includes smallpox) as potential evidence of efficacy.”
The contract with requires SIGA to develop its drug “for ultimate approval by the FDA.” FDA approval will help determine whether the government exercises its options to buy more of the drug in the future, turning a $433 million contract into a $2.8 billion windfall.
From a SIGA webpage: “The FDA has designated ST-246 for “fast-track” status, creating a path for expedited FDA review and anticipated regulatory approval.” What would justify the anticipation of said FDA approval when the use of animal models has yet to be decided?
While ST-246 may be an effective antiviral drug against orthopoxviruses, the way this contract was negotiated stinks to high heaven.
H/T: David Willman (LA Times), CDC, FDA.
Whether ST-246 works or not is irrelevant to the discussion.
Corrupt and otherwise suspect contracting practices linked to major political spending is the point of David’s article.
It is a valid point.
Kingsfield,
hilarious!
rafflaw
1, November 27, 2011 at 4:06 pm
A lot of food products posting on here today!
That is the most intelligent thing you’ve said all day. You may take your seat.
Blouise,
They could have at least thought of more creative monikers.
raff,
I was chuckling for an hour over your comment … “A lot of food products posting on here today!”
That was very entertaining.
Nal … there’s a bit of the devil in you … 🙂
Awwww….Shucks.
OS,
I must applaud your masterful dissection of the propagandists. Bravo, sir, bravo.
OS,
Those food names gave them away.
Nal, this was clearly a coordinated effort by PR types. I have listened to too many sales pitches by drug detail people to not recognize the style. I am not sure why a retired Major General would be in on the act so passionately unless he is one of those “Pentagon to Industry” lobbyist types.
Notice they sort of dried up when I dragged the conversation back to your original premise of questionable contracting. I don’t really think that is the conversation they want to have.
You guys seem to be good at making ridiculous comments and then patting each other on the back. Not one of you, for example, has done any research to confirm or deny my remarks. Or you could have looked me up and found out that, Omigod, no, I’m not some hired propagandist, I’m just an individual who has lost the ranch because of the Chimerix attacks. No, you just come up with some idiotic conspiracy theory and think you have said something brilliant instead of actually looking at what the three of us have written. The reason why our comments have “dried up” is because each of us has said what we wanted to say: this column, like the newspaper piece by Willman it is entirely based on (without further research), is BS. Just do a minute’s research and you’ll be shocked and stunned to find out we are right. Check out st-246: it works. Check out Chimerix’s history of protest against all phases of this RFP and contract: it happened. Check out Issa’s campaign contributions from MLA: those are real too. The only thing that would be hard to find is the fact that Chimerix’s primate test resulted in all the monkey’s dying, and the reason for that is because Chimerix took it off the Net, but a little digging will pry that out too. (But if you Google “Chimerix” and “monkeys died” you can find it on Seeking Alpha and a comment at Forbes and many other places.)
Go ahead and pat yourselves on the back. Ignorance loves company. And now I am out of here.
OS,
Right you are. I wasn’t expecting the response to this post that it got. These guys have been going around the blogosphere commenting on various sites. They’re preaching the good news about ST-246. There’s a “Mark” Nutello (Mike’s brother?) doing the duty over at The Volokh Conspiracy.
SIGA stock have been going down, YTD it’s down 86%. SIGA lost a court battle and now has to share 50% of their profits with PharmAthene.
They may have a good product but trying to use political influence to gain a higher profit margin was not a successful strategy. Whoever approved that strategy should lose his job.
Can’t post the link to the pdf report. It’s not showing up in spam.
Here’s another link to the report.
From “The Smallpox Issue” (page 57), prepared by RAND personnel:
Members of this panel are well versed in the risks posed by smallpox. Those risks-though real but, according to most experts in the field, admittedly of extremely low probability-do not justify the current reaction.
Nal, with the wars in the middle east winding down, the military-industrial complex needs desperately to have a boogy-man. If it is a faceless amorphous enemy who can wipe out civilization as we know it in one fell swoop, so much the better. Then they can keep the Patriot Act and spend tons more money on weapons. I have been thinking about this all day. If we are going to be fighting a guerrilla war, why are we still mobilizing as if we were still fighting WW-II?
Just what good is a fleet of B-2 or F-22 aircraft against a lone wolf with a VIED made out of stuff he can get down at the Tractor Supply Store or Farmer’s Co-Op? There was a lot more about that last anthrax scare than the US intelligence services are letting on. That was another most curiously timed adventure.
Are we expecting a smallpox to be used as a biological weapon?
The United States is not expecting a smallpox attack from terrorists. While there are concerns that smallpox virus could be held by terrorists, there are considerable technical and logistical barriers to the production and dissemination of smallpox virus as a weapon. Consequently, many experts believe the actual probability of using smallpox as a weapon for bioterrorism is quite low.
raff, they are amazingly easy to fabricate to favor one particular company or bidder. I have seen that crap pulled too many times over the past four decades to not recognize home cooking when I see it. You are right. This one does not pass the smell test.
OS,
I agree that the no bid contracts smell bad.
And furthermore, I understand exactly how criteria for a no-bid is set up. I have seen it done too many times before and it is actually not all that hard.
John McB. This is not my first rodeo. I have been flying airplanes longer than you. I did design work on the Titan II missile program during the early days of the cold war. One of my sons is buried in the National Cemetery. Two Hollywood movies have been made about two of my family members, one of them about how he came to be awarded the MoH. We are a family who has served since the founding of this country–and fought tyranny long before that. Take your snide comments about liberals elsewhere. This country was founded by people like me.
I am a scientist and have written many grants. The idea of a no-bid contract goes against everything I believe in since I took eighth grade civics. Nal’s post is about the 1% stealing the country, one contract at a time.
Ken Chowder:
Irrelevant. This is about political interference during government contract negotiations to benefit a donor. The argument that everyone else is doing it, is pathetic.
Pardon me if I’m a little skeptical regarding apocalyptical fantasies concerning WMDs.