XPost: alt.politics.democrats, misc.survivalism, alt.politics.economics   
   XPost: talk.politics.guns   
   From: georgej@live.com   
      
   Siga Obama smallpox drug deal, Billionaire Ronald O. Perelman   
   Obama donor, No bids contract, Sole source procurement, Drug not   
   tested   
      
   From the LA Times November 13, 2011.   
      
   “Cost, need questioned in $433-million smallpox drug deal   
      
   A company controlled by a longtime political donor gets a no-bid   
   contract to supply an experimental remedy for a threat that may   
   not exist.”   
      
   “Over the last year, the Obama administration has aggressively   
   pushed a $433-million plan to buy an experimental smallpox drug,   
   despite uncertainty over whether it is needed or will work.   
      
   Senior officials have taken unusual steps to secure the contract   
   for New York-based Siga Technologies Inc., whose controlling   
   shareholder is billionaire Ronald O. Perelman, one of the   
   world’s richest men and a longtime Democratic Party donor.   
      
   When Siga complained that contracting specialists at the   
   Department of Health and Human Services were resisting the   
   company’s financial demands, senior officials replaced the   
   government’s lead negotiator for the deal, interviews and   
   documents show.   
      
   When Siga was in danger of losing its grip on the contract a   
   year ago, the officials blocked other firms from competing.   
      
   Siga was awarded the final contract in May through a “sole-   
   source” procurement in which it was the only company asked to   
   submit a proposal. The contract calls for Siga to deliver 1.7   
   million doses of the drug for the nation’s biodefense stockpile.   
   The price of approximately $255 per dose is well above what the   
   government’s specialists had earlier said was reasonable,   
   according to internal documents and interviews.   
      
   Once feared for its grotesque pustules and 30% death rate,   
   smallpox was eradicated worldwide as of 1978 and is known to   
   exist only in the locked freezers of a Russian scientific   
   institute and the U.S. government. There is no credible evidence   
   that any other country or a terrorist group possesses smallpox.   
      
   If there were an attack, the government could draw on $1 billion   
   worth of smallpox vaccine it already owns to inoculate the   
   entire U.S. population and quickly treat people exposed to the   
   virus. The vaccine, which costs the government $3 per dose, can   
   reliably prevent death when given within four days of exposure.   
      
   Siga’s drug, an antiviral pill called ST-246, would be used to   
   treat people who were diagnosed with smallpox too late for the   
   vaccine to help. Yet the new drug cannot be tested for   
   effectiveness in people because of ethical constraints — and no   
   one knows whether animal testing could prove it would work in   
   humans.   
      
   The government’s pursuit of Siga’s product raises the question:   
   Should the U.S. buy an unproven drug for such a nebulous threat?   
      
   We’ve got a vaccine that I hope we never have to use — how much   
   more do we need?” — Dr. Donald A. Henderson   
   “We’ve got a vaccine that I hope we never have to use — how much   
   more do we need?” said Dr. Donald A. “D.A.” Henderson, the   
   epidemiologist who led the global eradication of smallpox for   
   the World Health Organization and later helped organize U.S.   
   biodefense efforts under President George W. Bush. “The bottom   
   line is, we’ve got a limited amount of money.”   
      
   Dr. Thomas M. Mack, an epidemiologist at USC’s Keck School of   
   Medicine, battled smallpox outbreaks in Pakistan and has advised   
   the Food and Drug Administration on the virus. He called the   
   plan to stockpile Siga’s drug “a waste of time and a waste of   
   money.”   
      
   The Obama administration official who has overseen the buying of   
   Siga’s drug says she is trying to strengthen the nation’s   
   preparedness. Dr. Nicole Lurie, a presidential appointee who   
   heads biodefense planning at Health and Human Services, cited a   
   2004 finding by the Bush administration that there was a   
   “material threat” smallpox could be used as a biological weapon.   
   Smallpox is one of 12 pathogens for which such determinations   
   have been made.   
      
   “I don’t put probabilities around anything in terms of imminent   
   or not,” said Lurie, a physician whose experience in public   
   health includes government service and work with the Rand Corp.   
   “Because what I can tell you is, in the two-plus years I’ve been   
   in this job, it’s the unexpected that always happens.”   
      
   Negotiations over the price of the drug and Siga’s profit margin   
   were contentious. In an internal memo in March, Dr. Richard J.   
   Hatchett, chief medical officer for HHS’ biodefense preparedness   
   unit, said Siga’s projected profit at that point was 180%, which   
   he called “outrageous.”   
      
   In an email earlier the same day, a department colleague told   
   Hatchett that no government contracting officer “would sign a 3   
   digit profit percentage.”   
      
   In April, after Siga’s chief executive, Dr. Eric A. Rose,   
   complained in writing about the department’s “approach to   
   profit,” Lurie assured him that the “most senior procurement   
   official” would be taking over the negotiations.   
      
   “I trust this will be satisfactory to you,” Lurie wrote Rose in   
   a letter.   
      
   In an interview, Lurie said the contract was awarded strictly on   
   merit. She said she had discussed buying a smallpox antiviral   
   for the nation’s emergency stockpile with White House officials   
   and with HHS Secretary Kathleen Sebelius, but that the   
   conversations focused on policy, not the manufacturer.   
      
   “We discussed the need for the product, and a need for a product   
   to be stockpiled,” Lurie said. “And we discussed an impending   
   procurement.”   
      
   Lurie denied that she had spoken with or written to Rose   
   regarding the contract, saying such contact would have been   
   inappropriate.   
      
   But in a subsequent statement, an HHS spokeswoman acknowledged   
   Lurie’s letter to Rose, saying it “reflects the critical   
   importance of the potential procurement to national security.”   
      
   Representatives of Siga, speaking on the condition they not be   
   identified, said the new drug has been effective in animal   
   testing and that the company is being paid a price commensurate   
   with its value.   
      
   Neither the HHS spokeswoman nor the Siga representatives would   
   disclose the agreed-upon profit margin or the per-treatment   
   price. Siga has cited terms of the contract in its public   
   financial statements — but without those financial details.   
      
   Worst-case scenarios   
      
   Worrying about worst-case scenarios is what biodefense planners   
   do. In the case of smallpox, millions of Americans have no   
   immunity because the vaccination of civilians ended in 1972. And   
   there is no way to guarantee that a rogue regime such as North   
   Korea is not holding smallpox.   
      
   Nonetheless, no such threat has been verified. The Bush   
   administration suspected Saddam Hussein of possessing smallpox   
   and other biological weapons, but inspectors did not find any   
   after the U.S. invaded Iraq in 2003.   
      
   Still, pressure to move quickly and spend more has helped shape   
   U.S. biodefense policy since the Sept. 11, 2001, terrorist   
   attacks and the anthrax mailings that fall.   
      
      
   [continued in next message]   
      
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