Cost, need questioned in $433-million smallpox drug deal

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?" 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.


Source:-

http://www.latimes.com/news/nationworld/nation/la-na-smallpox-20111113,0,4293298.story