Tracy Walters blog: Obama's $443 Million "Biodefense" Boondoggle

The Los Angeles Times serves up a withering blow to the Obama administration today in a surprisingly no holds barred account of how the Department of Health and Human Services is pushing through a no-bid $443 million contract for a smallpox drug that leading epidemiologists say we don't need, and representatives at FDA say has little chance of approval for use in humans. Huh? Oh, yeah. Another thing: Siga Technologies, Inc, the company that Obama has cherry picked to provide this experimental drug (with a shelf-life of 38 months compared to decades for current smallpox vaccines) was ineligible for the original federal contract due to its size and is controlled by billionaire Democratic Party and Obama inauguration super-donor, Ronald Perelman.

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."

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)