Beneath a COVID vaccine debacle, 30 years of government culpability

As the Biden administration tries to stanch yet another wave of the coronavirus pandemic, senior White House officials have also been considering a proposal to ensure the nation is better prepared for the next infectious disease outbreak.

Key to the plan is the creation of a taxpayer-funded “vaccine hub” where experienced drugmakers would partner with the government, reliably churning out millions of doses under federal oversight.

The proposal is partly a response to a searing failure by a once obscure Maryland biotech firm, Emergent BioSolutions. While Pfizer and Moderna had spectacular success producing vaccines, the government entrusted the manufacturing of two of the other leading candidates to Emergent, which was forced to toss tens of millions of doses of Johnson & Johnson’s vaccine and to quit producing the AstraZeneca vaccine because of serious quality problems that ultimately led the Biden administration to cancel its contract.

The government’s partnership with Emergent, which cost taxpayers hundreds of millions of dollars over the past decade, was supposed to be a pillar of the nation’s pandemic preparedness. Instead, it proved to be the culmination of 30 years of frustrations.

Three times over the past three decades, presidential administrations explored plans for a vaccine overhaul like the one President Joe Biden is now considering, only to be thwarted by pharmaceutical lobbying, political jockeying and cost concerns, a New York Times investigation found.

In each case, the nation was left ill-prepared for the next crisis — while creating a vacuum Emergent eagerly filled.

“The reason why Emergent got so many contracts is mostly because they were the only ones willing to do the work,” said Dr Kenneth Bernard, a top biodefense adviser to Presidents Bill Clinton and George W Bush.

To reconstruct the forgotten history that led to the debacle at Emergent’s Baltimore plant this year, the Times reviewed thousands of pages of records — among them files from presidential and military archives, previously undisclosed government reports, industry correspondence and business plans.

Reporters also interviewed more than 30 people who have helped shape US biodefense policy, including officials from five presidential administrations, corporate executives and industry consultants.

Time and again, the Times found, analyses commissioned by the federal government arrived at a similar conclusion: Ensuring access to specialised vaccines is a public good that cannot be left entirely to the market; yet it is unrealistic for the government to take on the task alone.

But while the government has tried to enlist major pharmaceutical companies, they have largely been reluctant to divert resources from commercial products. At the same time, they have stood in the way when the government has proposed its own factory, fearing a taxpayer-backed competitor.

Repeatedly, the Times found, a middle path won support in Washington: a government plant run by a major drugmaker. Budgets were drawn up and sites selected.

But the momentum always evaporated. The government opted for incremental changes, dangling incentives before less-experienced companies — chief among them Emergent.

Once again, a public health crisis has laid bare the heavy cost of that approach.

An Emergent spokesperson, Matt Hartwig, acknowledged the company’s struggles but said it had taken on a difficult task others would not.

Project Badger

Long before Operation Warp Speed, there was Project Badger.

Then, as now, the government scrambled to secure manufacturing capacity in the midst of a crisis, finding itself with effective vaccines but few places to mass-produce them. Then, as now, officials proposed greater federal intervention to ensure the nation was not again caught unprepared.

In 1990, as the US military planned an operation to expel the invading Iraqi army from Kuwait, officials received a sobering intelligence report: Saddam Hussein was probably in possession of anthrax and botulinum toxin.

The Defence Department had vaccines for both threats, but the supply was small. Project Badger searched for a solution.

Officials identified more than a dozen companies that might be able to make more of the vaccines and tried to persuade them to help. None of them agreed, unclassified documents show.

The companies had concerns about legal liability and did not want to invest in switching production lines if the government could not promise large purchases after the crisis.

Ultimately, the military had to limit vaccination to troops considered at the highest risk. Chastened, the Pentagon commissioned a study that recommended a federal site run by an experienced manufacturer.

In 1993, the Pentagon informed Congress it planned to build a vaccine site and soon chose a location in Pine Bluff, Arkansas. But the Democratic-led Congress, balking at the $200 million price tag, barred spending until further study.

‘The Private Sector Has Failed Us Terribly’

Where most big vaccine makers saw a small, unreliable market, an entrepreneur named Fuad El-Hibri saw an opportunity.

Born in Germany and educated at Stanford and Yale, El-Hibri had worked in banking and telecommunications before advising a company that held the rights to distribute the British government’s anthrax vaccine.

So he was interested when the state of Michigan announced in 1997 it was selling its vaccine lab. The aging factory needed major renovations but came with a unique asset: the license for the only anthrax vaccine approved by US regulators.

El-Hibri put together a bid that allowed the company he created — BioPort, later known as Emergent BioSolutions — to secure the license and eventually earn billions.

As the young company struggled to make the vaccine, the federal government spent more than $30 million to keep it afloat.

A long-feared biological threat suddenly became real, and the country was again unprepared.

Shortly after the Sept. 11 attacks, a string of anthrax-laced letters caused a national panic.

But BioPort still had not fully addressed regulators’ concerns, and the vaccine supply was rapidly dwindling.

As Congress debated what to do, Sen. Tim Hutchinson, offered a solution: build a federal plant operated by a private company.

“There are certain things only government can do,” Hutchinson said at an October 2001 hearing, “and in this case, the private sector has failed us terribly.”

The revived idea had already been gaining support. Spurred in part by BioPort’s struggles, the Defense Department had commissioned another expert study. It concluded the government’s approach “is insufficient and will fail” and backed building a government site.

The surgeon general encouraged the Defence Department to begin work, suggesting the site would safeguard civilians.

But the next year, the defense budget no longer included money for the project. Sen. Kay Bailey Hutchison, R-Texas, wrote to Paul Wolfowitz, the deputy secretary for defense, demanding to know why. Wolfowitz cited new interest from the private sector.

While the pharmaceutical industry pledged support, its lobbyists descended on Washington to make sure one thing did not happen.

Large drug companies “are ready to come to the table,” Frank Rapoport, a pharmaceutical lobbyist, told Congress, “but they do not want some humongous government facility that is going to compete against them.”

Rapoport and other industry consultants worked with Congress and the Bush administration to craft a different plan.

The outcome, a 2004 law known as the Project BioShield Act, was another bet that juicier incentives and guaranteed funding — a $5.6 billion reserve — would attract experienced manufacturers. Two years later, Congress went further and created an agency — the Biomedical Advanced Research and Development Authority, or BARDA — to help companies through the expensive and risky late stages of developing biodefense products.

Despite the changes, large pharmaceutical companies mostly sat out. None of the first contracts went to a major vaccine maker.

Yet again, the government had to turn to smaller biotech firms to fill the void. El-Hibri’s company was ready.

Rebranding itself as Emergent, the company moved its headquarters from Michigan to Gaithersburg, Maryland — just a short drive from its biggest customer, the federal government.

The third time a government-commissioned study recommended a federal manufacturing site, Emergent was positioned better than ever.

‘A Troubling Lack of Commitment’

The 2009 report suggested a variation on the previous recommendations: The vaccine site should be owned by a nonprofit that could partner with major pharmaceutical companies while remaining accountable to the public and not shareholders.

Officials at the University of Pittsburgh Medical Center, which had led the review under a federal contract, went on to establish a nonprofit of their own. They called it 21st Century Biodefense and placed it under the leadership of Robert Cindrich, a former federal judge who was the center’s chief legal officer.

One by one, Cindrich and his colleagues got titans of U.S. industry to sign on, including General Electric and IBM.

The biggest prize was Merck. By persuading the company to help run the proposed factory and train its staff, the Pittsburgh group had done what the government had been attempting for years.

The 2009 H1N1 influenza pandemic had once again put a spotlight on biodefense, and a review by the health department had proposed manufacturing centers that sounded much like what the Pittsburgh group was suggesting.

When the health department asked for bids in September 2010, however, the group’s leaders were stunned by its scaled-back vision. The proposal essentially called for upgrading existing sites and renting manufacturing capacity.

In a letter, the Pittsburgh group warned the government that the approach “signals a troubling lack of commitment to the biodefense mission” and “will fail.”

Other potential bidders had similar concerns. Some questioned whether government orders would actually materialize, and they worried that private customers would not contract with a site where their products could be bumped by government orders.

The Pittsburgh group dropped out.

In 2012, BARDA awarded three contracts worth about $400 million.

At first, it appeared that the agency had attracted two large pharmaceutical firms — Novartis and GlaxoSmithKline — but their involvement proved temporary.

It was the third winning bidder that the government relied on most heavily when the coronavirus pandemic arrived: Emergent.

At a congressional hearing this May, the scene was eerily familiar, but this time the crisis was unparalleled in scale.

El-Hibri, facing irate questioning, declared Emergent’s manufacturing troubles “unacceptable” and pledged improvements — much as he had two decades earlier when called to answer for his company’s struggles making anthrax vaccines. Emergent was hardly flawless, he said, but it had taken on a difficult task when others had not.

Over the years, the government had commissioned little work at the site, leaving the plant and its workforce largely untested, a government review found in 2018. In fact, before the pandemic, Emergent had yet to earn regulatory approval to manufacture anything at a commercial scale at the Baltimore plant.

In November, the Biden administration cancelled the contract, and now, for a fourth time in 30 years, the federal government is assessing its failures and searching for solutions.

© 2021 The New York Times Company