December 1, 2021

McKenzielee Blog

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Biden admin, troubled vaccine contractor terminate contract

2 min read

A contract between the Biden administration and Emergent BioSolutions, a vaccine contractor who has struggled with production failures during the pandemic, has been canceled.

During an Emergent call with investors Thursday, company executives said their contract with the federal government, which was worth $600 million, has been terminated, The New York Times reported

The contract was signed at the beginning of the pandemic in 2020, but the administration stopped payments after the spring of this year when issues at the company’s Maryland plant were disclosed. 

This March, the plant was found to have ruined millions of doses of the Johnson & Johnson vaccine by contaminating it with the Astra Zeneca vaccine.

Production was halted by the Food and Drug Administration (FDA) after the contamination, but the plant was allowed to reopen after an inspection in August.

The company said they had agreed to forego $180 million of the contract’s $600 million total, per the Times.

A company spokesperson said in a statement to The Hill that Emergent proposed ending the contract in October, and the Department of Health and Human Services (HHS) agreed. 

The spokesperson said the contract was terminated Nov. 1.

However, a senior official for the Biden administration told the Times that the federal government — not Emergent — initiated the termination of the contract.

Documents from the Securities and Exchange Commission say Emergent and the HHS “mutually agreed” to cancel the agreement.

Another contract between the company and the federal government that began in 2012 was also canceled years before its end date, Emergent chief executive Robert Kramer said on the call with investors, according to the Times. 

Per the contract signed in 2012, which was meant to improve the country’s pandemic preparation, Emergent agreed to expand its vaccine production in return for $163 million from HHS.

Kramer said on the call that the goal “as it was contemplated back in 2012, was a good idea at the time, but unfortunately it didn’t work out as it was anticipated,” according to the Times.

In an op-ed for The Baltimore Sun, Kramer directed blame for the failures of the contracts toward the government.

“The original intent of this partnership was to create a facility that could produce 50 million dose-equivalents of influenza vaccine drug substance in four months in the event of a pandemic,” Kramer said. “Facility expansion was only a first step. To build and maintain a state of readiness, continued investment is a necessity. The government maintained that they would provide us with the necessary drug development work to build and maintain those capabilities. That didn’t happen.”


https://thehill.com/policy/healthcare/580211-biden-admin-troubled-vaccine-contractor-terminate-contract

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