Corona Daily 157: The Emergent Story: Part Final

In 2017, just a year after threatening to go bankrupt if the government didn’t bail it out, Emergent spent $200 million acquiring Sanofi’s smallpox vaccine, and GlaxoSmithKline’s anthrax treatment, two products with established pipelines to the stockpile. Eyebrows were raised and questions were asked as to how a poor and nearly bankrupt company could spend $200 million.

The company’s financial disclosures show it has received since 2017 a half-billion dollars in federal research and development funding. “We know ahead of time when funding opportunities are going to come out. When we talk to the government, we know how to speak the government’s language around contracting.” Said Emergent’s VP in 2017.

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Dr Nicole Lurie from the Obama administration had tried to reduce the BioThrax purchases. Trump replaced her with Dr Robert Kadlec, a biodefence expert obsessed with biological and chemical weapon threats. He repeatedly said Mother Nature was not a thinking enemy capable of inflicting harm to the USA. It was the man-made threats the stockpile should focus on.

Under the guise of removing bureaucracy, Dr Kadlec concentrated all decision-making in his own hands. He dismissed warnings from scientists that a natural pandemic could also be devastating. Citing limited budgets, Kadlec cancelled an Obama-era $35 million initiative to build a machine to produce 1.5 million N95 masks every day.   

It must be mentioned here that in summer 2012, Kadlec and El-Hibri had formed a biodefence company together. El-Hibri is the founder and managing director of Emergent. Later, Kadlec worked as a biosecurity consultant for Emergent. In July 2017, when Trump nominated him, he was required to fill the questionnaire for the Senate interview. He was asked to mention any work with companies that would create a potential conflict of interest. Kadlec wrote: none. He reported all jobs since the 1980s, but forgot his consultancy work with Emergent.

As soon as the Senate confirmed him, the stockpile focus began to shift further from infectious diseases to man-made threats. Large transparent gatherings were replaced by secret meetings for decision-making. “There has been foreign penetration by hostile governments stealing our national security information. So, we don’t hold it in the open anymore.” Said Kadlec.

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In July 2017, four days after Kadlec’s nomination, Emergent acquired the rights to a smallpox vaccine from the government’s previous supplier. Sanofi, the supplier, was charging $4.27 per dose.

The CDC in August 2018 said it intended to sign a five-year contract with Emergent for the smallpox vaccine. A month later, Kadlec declared the contract with Emergent was for ten years, and Emergent would be paid $9.44 per dose in the first year, a figure that would rise in succeeding years. Smallpox remains a potential threat to security, he said.

CDC mentioned on its website USA had enough smallpox vaccine for every American. In effect, every year the oldest stocks expired, were destroyed, and replenished by new stocks.

Kadlec also awarded Emergent a contract for $535 million to supply a product to take care of the side effects of smallpox vaccination. Another $67 million were paid to Emergent for a drug to treat cyanide exposure.

In March 2020, when testifying before Congress, Kadlec said he had not fully accounted for a scenario like the covid-19 crisis. “We thought about vaccines. We never thought about respirators being our first and only line of defence for health-care workers.” He said.

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In the last twelve months, Emergent has signed collaboration agreements with Novavax, J&J, and AstraZeneca for Emergent to manufacture their covid-19 vaccines at the Baltimore plant. Emergent petitioned and was approved to manufacture those vaccines. For the 2020 elections, Emergent handsomely contributed to both Republicans and Democrats.

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If you live in a country outside the USA, and are ashamed of the level of corruption in your country, you don’t need to be. Developed countries have more developed and sophisticated ways of corruption. Through checks and balances, independent judiciary, media scrutiny; corruption finds its way and prospers year after year. That is another issue the pandemic has succeeded in highlighting.

Ravi