Obama, A Billionaire Donor & A No-Bid Contract

Obama, A Billionaire Donor & A No-Bid Contract

November 16th, 2011 // 2:15 pm @

What happens when you cross a billionaire, who controls a small biotech with a smallpox drug and who donates lots of money to politicians, with a White House that is pushing biodefense measures? You may get a questionable no-bid contract awarded to the little biotech to supply an experimental vaccine for a threat that may not exist.

At least that is how The Los Angeles Times describes the situation involving the Obama administration and Ronald O. Perelman, a Democratic Party donor who controls Siga Technologies, which was awarded a $433 million contract earlier this year to deliver a drug at a price per dose that government specialists determined was unreasonable.

Through his MacAndrews & Forbes Holdings, Perelman bought Siga eight years ago and, shortly afterwards, the experimental drug, as well. Siga was later awarded two research grants from the National Institute of Allergy and Infectious Diseases. But the contract awarded earlier this year by the US Department of Health and Human Services is raising questions about pay-to-play.

The Times writes that senior HHS officials replaced the lead government negotiator on the contract after resisting Siga financial demands. And when Siga was in danger of losing its grip on the contract last year, officials blocked others from competing. In the end, Siga was awarded a no-bid contract last May and must deliver 1.7 million doses at a price of about $255, the Times writes, adding that there is no credible evidence that any other country or a terrorist group possesses smallpox.

Moreover, the drug cannot be tested for effectiveness, since running a trial would raise ethical concerns. And the federal government already has $1 billion worth of smallpox vacccine stockpiled that costs $3 a dose and is supposed to be capable of preventing death if given within four days of exposure, the Times continues. Thomas Mack, an epidemiologist at the University of Southern California’s Keck School of Medicine who has advised the FDA on the virus, tells the paper that stockpiling the Siga drug is “a waste of time and a waste of money.”

Meanwhile, Nicole Lurie, the presidential appointee who heads biodefense planning at HHS, intervened when an HHS official carped that Siga would earn an “outrageous” profit. According to the Times, the Siga ceo complained and she wrote back to say the negotiator would be replaced. She denied to the paper that she ever communicated with the Siga ceo, but got caught.

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