$5.6 Billion Anti-bioterror Drug Project Stalled

September 21, 2006

Newsmax

A U.S. effort to stockpile anti-bioterror drugs that was launched after the

anthrax attacks in 2001 has now bogged down as two rival biotech companies

battle for government dollars.

After five Americans were killed by anthrax, the U.S. launched Project

BioShield, a $5.6 billion program to devise new drugs and vaccines for a variety

of bioterror threats. The highest priority – and a $900 million outlay – was for

an anthrax vaccine.

The government already had an anthrax vaccine to inoculate military personnel,

but it required six shots over 18 months and could have nasty side effects,

according to a front-page story in the New York Times.

There have been reports of serious complications, and the military halted

mandatory vaccinations in 2004 after some soldiers filed lawsuits seeking to

avoid getting the shots.

So Project BioShield sought to develop a new vaccine, and turned to a small

biotech company, VaxGen, which had never taken a drug to market and had had

financial troubles in the past.

The U.S. awarded an $887 million contract to Brisbane, Calif.-based VaxGen to

produce 75 million doses of the vaccine, enough to inoculate 75 million

Americans.

But that drew complaints from Emergent BioSolutions in Gaithersburg. Md., the

maker of the old vaccine.

The company hired lobbyists to plead its case to the government, pointing to

problems VaxGen was having developing a new vaccine and urging the U.S. to buy

more doses of the old vaccine, Emergent’s only major product.

VaxGen countered by hiring lobbyists of its own, including Houseman,

who had worked for Emergent and then switched sides.

In May, the Department of Health and Human Services agreed to double its order

of Emergent’s vaccine to 10 million doses, worth $243 million, the Times

reports.

The agency also demanded additional safety and efficacy tests for VaxGen’s new

vaccine that will further delay its delivery by a year or more.

Now VaxGen wants upfront payments from the health department and is

threatening to sue. If the two sides can’t come to an agreement, company

officials say, VaxGen could end the deal.

" This ought to be driven by the science, by efficacy and threat, not

lobbyists,” said Houseman. " It has been shanghaied. And the implication is our

national security is compromised.”

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