In the aftermath of the $535 million Solyndra boondoggle, it is difficult to muster surprise over this. I did find it shocking that HHS confirmed that Dr. Nicole Lurie, a presidential appointee who heads biodefense planning at Health and Human Services, lied about writing a letter to Siga's CEO, signaling that HHS would cave on price negotiations:
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."The article is quite damning on its face; which, considering its source, has me wondering what's the real story?
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 importance of the potential procurement to national security." (emphasis mine)
Read the whole thing.