Reporting from Washington 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.
More shady deals hinted
At a number of points in its troubled history, solar-panel manufacturer Solyndra faced dire financial problems that threatened its survival. Yet at each crisis, Energy Secretary Steven Chu and officials at his agency failed to take steps that critics say could have limited taxpayer losses when the company collapsed this summer.
Instead, Energy Department officials monitoring Solyndra and its $535 million federal loan took extraordinary steps to prop up the company, according to a Washington Post analysis of previously confidential documents. This is only news to WaPo readers, however.
On Friday, the release of a new round of White House documents added more details, showing concerns among senior advisers earlier this year that Solyndra might erupt into a political scandal requiring the replacement of Chu and his agency team. A former Obama campaign adviser wrote to presidential counselor Pete Rouse in February suggesting that Chu be replaced immediately with a manager who could better direct Energy Department funds. The memo warned of GOP attacks "that are surely coming over Solyndra and other Energy Department deals that have gone to Obama donors and have underperformed." There are MORE shady deals, Pete?
Energy Department spokesman Damien LaVera said the agency tried to help Solyndra recover so that workers could keep their jobs and taxpayers would be repaid. He said Chu and other officials supported Solyndra based on information provided by the company. Of course. Now it's about the jobs. But why would you ignore all the worries? Why put the taxpayers in last place for payback?
In July, company executives told House committee members in a letter that "the company just completed a record quarter for shipments, with strong demand in the United States. Last year we shipped 65 megawatts of panel production and expect that to double again this year." Profits are soooh capitalistic!
Energy Department officials did not dispute these assertions, which echoed those made four months earlier by Solyndra, in an interview with The Post: "We doubled our production from 2009 to 2010. We'll double it again from 2010 to 2011. " And double our profits. Or losses. Whatever. The Post didn't ask about profitability?
But financial records show that the company was selling its panels at a loss and that its revenue in fall 2009 was substantially the same as in spring 2011. An internal White House memo put it this way: "The company has had 0 percent sales growth since [fall] 2009." Even better. Doubled production, doubled costs, no more sales revenue. Inventory building. Hmmmm... Does that have an effect on cash flow?
Outsiders watching the saga unfold worried months before Solyndra's collapse that Obama would take a political hit over investing federal money in the company.
In February, outside energy adviser Dan Carol, an Oregon professor who worked on Obama's 2008 presidential campaign, sent a blistering e-mail to senior White House officials, declaring that the Energy Department had suffered a "deployment failure" and urging Obama to "make major leadership changes as soon as possible."
"Secretary Chu is a wonderful and brilliant socialist man, but he is not perfect for the other critical DOE mission: deploying existing technologies at scale and creating jobs," Carol wrote in the e-mail released Friday. Capitalist jobs? Ones that earn money, Professor? Add value to the economy?
Carol predicted that "GOP attacks . . . are surely coming over Solyndra and other inside DOE deals that have gone to Obama donors and have underperformed. No reason to fuel that coming storm, and believe me it will come." There we go again - "other inside DOE deals". Maybe the Professor should testify. The WaPo article ends here, with a teaser. Maybe they don't get it.
Posted by: Bobby ||
11/12/2011 08:03 ||
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Link ||
[11124 views]
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#1
The "sell more at a loss so we can make it up in volume" play. Gotcha. And this is the BEST CASE scenario that presumes ignorance rather than guile.
Posted by: Whiskey Mike ||
11/12/2011 9:37 Comments ||
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#2
I wish they would go back to the Carter years to investigate this solar power business. Abramoff is going public after three years in prison but what he speaks of tells the truth. The why of governments wanting to manage so much of everything.
Every Republican incumbent--52 in the House, 15 in the Senate--won. The state GOP is looking at unified control over government for only the second time since the Civil War. This is after winning all three top statewide offices--including the election of Gov. Bob McDonnell--in 2009, and picking off three U.S. House Democrats in last year's midterms.
Topline figures aside, what ought to really concern the White House was the nature of the campaign, and the breakout of Tuesday's election data. Mr. Obama may have big plans for Virginia, but the question is increasingly: him and what army?
Elected state Democrats--who form the backbone of grass-roots movements--couldn't distance themselves far enough from Mr. Obama in this race. Most refused to mention the president, to defend his policies, or to appear with him. The more Republicans sought to nationalize the Virginia campaign, the more Democrats stressed local issues.
State House Minority Leader Ward Armstrong felt compelled to run an ad protesting that it was a "stretch" for his GOP opponent to "compare me to Barack In case you missed it, this week, there was a tragedy in Kansas. Ten thousand people died -- an entire town destroyed Obama." After all, he was "pro-life, pro-gun and I always put Virginia first." (Mr. Armstrong lost on Tuesday.)
Virginia Democrats were happy to identify with one top official: Republican Gov. Bob McDonnell, who is providing a lesson in the benefits of smart GOP governance in battleground states. Criticized as being too socially conservative for Virginia when he was elected in 2009, Mr. McDonnell has won over voters by focusing on the economy and jobs. His approval ratings are in the 60s, and he helped raise some $5 million for local candidates. He's popular enough that Democrats took to including pictures of him in their campaign literature, and bragging that they'd worked with him.
Mr. McDonnell has been particularly adept at connecting with the independent, white-collar voters Mr. Obama used to win Virginia in 2008. That crowd lives in North Virginia's booming exurb counties of Prince William and Loudoun, and presidential races hinge on their votes. Mr. Obama's 2008 victory in Virginia rested on his significant wins in both Loudoun (8%) and Prince Williams (16%).
Yet Tuesday's results showed the extent to which that support has reversed. Loudoun in particular proved an unmitigated rout for Democrats. Republicans won or held three of four of the county's Senate seats. It swept all seven of the county's House seats. It won all nine slots on the county's Board of Supervisors, and pretty much every other county office. In Prince William, the story was much the same. This is what happens when a recent Quinnipiac poll shows Mr. Obama's approval rating among Virginia independents at 29%.
Democrats are now arguing that turnout (about 30%) was too low to prove anything, but then again, the particularly low Democratic turnout suggests that, on top of everything else, the White House really does face an enthusiasm gap. It's still got time to try to remedy that problem, and some other Virginia fundamentals. But going by Tuesday's results, Mr. Plouffe might need to start considering Electoral Plan C.
Posted by: Fred ||
11/12/2011 00:00 ||
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#1
The state House and Senate wins were against a redistricting map recently drawn up by the former Dem majorities.
#2
It was a typical low turnout election so it's even more surprising, since you'd think the Dems could get their reliables, including the cemetery votes, to the polls. That the Pubs had the better of it really suggests that things have gone bad big time in Virginia for the Dems.
Posted by: Steve White ||
11/12/2011 10:01 Comments ||
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#3
One of the political blogs mentioned that, due to gerrymandering, the Dems got 39% of the popular vote and ~50% of the seats.
Unfortunately gerrymandering won't save Obama in 2012, since it is a nationwide election.
Al
Posted by: Frozen Al ||
11/12/2011 10:32 Comments ||
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#4
..well, counting those 57 states in the tally, I wouldn't be absolutely sure. /sarc off
#5
I don't think that there were too many cemetery voters - I had to show a picture id in order to vote. (I showed them my retired military id, rather than my driver's license.)
Posted by: Rambler in Virginia ||
11/12/2011 13:51 Comments ||
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#6
...Maybe, maybe not. Remember it not who votes that counts but who counts the vote.
#8
but a 3rd party just might. - A strong warning to the Country Club bozos to shape up.
Posted by: Water Modem ||
11/12/2011 14:07 Comments ||
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#9
Water, you may be operating on a false premise there. What evidence do you have that the Country Club Bozos WANT Obama to lose? After all, president Goldman-Sachs has done them pretty damn well (to the tune of almost 2 trillion in debt).
Billionaire Ronald O. Perelman is a long-time donor to the Democratic Party and the controlling shareholder in Siga Technologies, Inc. In May Siga was awarded the final contract (total value $433 million) to supply an experimental & untested anti-smallpox drug to the nation in a "sole source" procurement. Siga was the only company asked to bid. Government officials intervened repeatedly to ensure the bid was awarded to Siga.
The contract involves Siga supplying 1,700,000 doses of the drug at $255/dose, well above what previous government specialists said was appropriate. Dr. Thomas H. Mack, a USC epidemiologist and FDA advisor, called the entire stockpiling plan a waste of time and money.
Due to ethical concerns, it is highly unlikely the drug will even be tested on humans.
A multi-volume chronology and reference guide set detailing three years of the Mexican Drug War between 2010 and 2012.
Rantburg.com and borderlandbeat.com correspondent and author Chris Covert presents his first non-fiction work detailing
the drug and gang related violence in Mexico.
Chris gives us Mexican press dispatches of drug and gang war violence
over three years, presented in a multi volume set intended to chronicle the death, violence and mayhem which has
dominated Mexico for six years.
Rantburg was assembled from recycled algorithms in the United States of America. No
trees were destroyed in the production of this weblog. We did hurt some, though. Sorry.
[Wall Street Journal] 
Virginia Democrats were happy to identify with one top official: Republican Gov. Bob McDonnell, who is providing a lesson in the benefits of smart GOP governance in battleground states. Criticized as being too socially conservative for Virginia when he was elected in 2009, Mr. McDonnell has won over voters by focusing on the economy and jobs. His approval ratings are in the 60s, and he helped raise some $5 million for local candidates. He's popular enough that Democrats took to including pictures of him in their campaign literature, and bragging that they'd worked with him.
Yet Tuesday's results showed the extent to which that support has reversed. Loudoun in particular proved an unmitigated rout for Democrats. Republicans won or held three of four of the county's Senate seats. It swept all seven of the county's House seats. It won all nine slots on the county's Board of Supervisors, and pretty much every other county office. In Prince William, the story was much the same. This is what happens when a recent Quinnipiac poll shows Mr. Obama's approval rating among Virginia independents at 29%.
