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$5.6 Billion Anti-bioterror Drug Project Stalled


A U.S. effort to stockpile anti-bioterror drugs that was launched after the anthrax attacks in 2001 has now bogged down as two rival biotech companies battle for government dollars.

After five Americans were killed by anthrax, the U.S. launched Project BioShield, a $5.6 billion program to devise new drugs and vaccines for a variety of bioterror threats. The highest priority – and a $900 million outlay – was for an anthrax vaccine.

The government already had an anthrax vaccine to inoculate military personnel, but it required six shots over 18 months and could have nasty side effects, according to a front-page story in the New York Times.

There have been reports of serious complications, and the military halted mandatory vaccinations in 2004 after some soldiers filed lawsuits seeking to avoid getting the shots.

So Project BioShield sought to develop a new vaccine, and turned to a small biotech company, VaxGen, which had never taken a drug to market and had had financial troubles in the past.

The U.S. awarded an $887 million contract to Brisbane, Calif.-based VaxGen to produce 75 million doses of the vaccine, enough to inoculate 75 million Americans.
But that drew complaints from Emergent BioSolutions in Gaithersburg. Md., the maker of the old vaccine.

The company hired lobbyists to plead its case to the government, pointing to problems VaxGen was having developing a new vaccine and urging the U.S. to buy more doses of the old vaccine, Emergent’s only major product.

VaxGen countered by hiring lobbyists of its own, including Robert Houseman, who had worked for Emergent and then switched sides.

In May, the Department of Health and Human Services agreed to double its order of Emergent’s vaccine to 10 million doses, worth $243 million, the Times reports.

The agency also demanded additional safety and efficacy tests for VaxGen’s new vaccine that will further delay its delivery by a year or more.

Now VaxGen wants upfront payments from the health department and is threatening to sue. If the two sides can’t come to an agreement, company officials say, VaxGen could end the deal.

"This ought to be driven by the science, by efficacy and threat, not lobbyists,” said Houseman. "It has been shanghaied. And the implication is our national security is compromised.”