$150 million anthrax vaccine contract goes to firm with close Democratic Party ties

Published 26 February 2010

The Department of Health and Human Services (HHS) announced on the evening of 29 December that it was awarding PharmAthene $150 million to develop and produce an anthrax vaccine; FOXNews notes the strong ties to the Democratic Party of senior company executives

The Obama administration has awarded up to $150 million in federal funding for the development and production of an anthrax vaccine to a biodefense firm with strong Democratic Party ties, FOXNews’s James Rosen reports

Federal records show that executives of the company awarded the contract, as well as its investors and related lobbyists, have long been active contributors to Democratic Party causes and campaigns, including the 2008 presidential campaign of President Obama.

The deal was announced in a “special notice” posted by the Department of Health and Human Services (HHS) on the evening of 29 December.

The company is PharmAthene, Inc., a publicly held firm based in Annapolis, Maryland, was going to receive a “contract modification” that would mark an “expansion” — without having to face competitive bidding — of an existing contract the company held with the National Institutes of Health (NIH).

The HHS announcement said: “PharmAthene Inc. has been under contract with the U.S. government since 2003 to develop an (anthrax) vaccine via Contract N01-AI-30052.”

Rosen writes that this was untrue:

Contract N01-AI-30052, awarded by NIH’s National Institute of Allergy and Infectious Diseases after competitive bidding in September 2003, actually went to a firm called Avecia Ltd., based in Manchester, England.


That contract was worth up to $71.3 million and was designed to support Avecia in the ‘development and production of a vaccine to protect the general United States population against inhalation anthrax … (to) evaluate safety, develop the optimal dose and dose regimen and extend the age range and populations for which the vaccine will be indicated.’

PharmAthene, however, acquired Avecia, at an estimated cost of $40 million, four-and-a-half years later, in April 2008. “And the ‘modification’ of the old Avecia contract to benefit PharmAthene came only after HHS abruptly canceled still another contract, which was still being bid on by PharmAthene and a competitor, Emergent Biosolutions.” Rosen writes.


Both HHS and PharmAthene strongly disagree with Rosen’s characterization of the contract.

  • HHS officials said that contract’s cancellation, announced 7 December, was ordered because both companies had difficulties meeting highly technical licensing requirements.
  • PharmAthene’s director of corporate communications, Stacey Jurchison, told Fox News that HHS made the 29 December announcement in order to keep the anthrax vaccines programs “on track” and “on schedule.” She told Rosen that characterizing the modification of the old Avecia contract as a no-bid deal is “misleading,” because other funding opportunities established under HHS’s Biomedical Advance Research and Development Authority (BARDA) enable PharmAthene and competitors like Emergent to compete on an even plane for available bio-defense taxpayer dollars. “If there is an existing contract for one of our competitors,” she said, that, too can be modified, adding: “I don’t think (the 29 December announcement) precludes Emergent from staying in the race.”
  • Eric Richman, PharmAthene’s senior vice president for business development and strategic planning, said that although PharmAthene has seen the charge that the 29 December announcement represented a no-bid deal “pop up a few times,” the charge is “completely false.” Richman noted that the 29 December announcement marked the 18th modification announced on the old Avecia contract, and that “contract modifications are done routinely.” During a brief period after 29 December, when other bio-defense firms were permitted to provide comment to HHS on the contract modification, Richman told Rosen, no other firms did.

Rosen notes, however, that industry sources told him that at least one competing firm, Emergent, did provide comment to the department.