Bioshield Yields Limited Results

The United States has made only about 10 drug orders under Project Bioshield, the $5.6 billion program initiated in 2004 to spur development of countermeasures against weapons of mass destruction, the Financial Times reported yesterday (see GSN, Feb. 22).

For large pharmaceutical companies, the contracts offered under the program were simply too small to pique their interest.  However, a number of smaller biotechnology firms sought to produce drugs against potential terrorism threats such as anthrax, plague and smallpox.

“From a financial point of view, it was clearly attractive, like a glorified grant,” said Gordon Cameron, departing chief executive at British vaccine maker Acambis.

The pace of procurement has not met hopes, undermining investor interest in biodefense.

“The government did not put out procurements fast enough.  And they have mostly been in smallpox or anthrax.  They haven’t spent all the money,” said biotechnology attorney Frank Rapoport, who helped prepare the program.

The federal government has failed to meet its pledge to fund development of promising drugs, rather than only buying countermeasures known to be safe and available for production, some companies say.

Some of these firms spent tens of millions of dollars on drugs that never received Bioshield contracts, and in the meantime missed the chance to work on other products, according to the Times.

California firm VaxGen Inc. nearly collapsed after the Health and Human Services Department canceled an order for 75 million doses of a new anthrax vaccine.  The cancellation occurred after the agency changed the contract and demanded additional tests of the drug, production of which was far behind schedule (see GSN, April 6).

“You can’t subject drug development to arbitrary timelines.  By its very nature, it is fraught with delays and uncertainties because human biology is a very uncertain process,” said VaxGen Vice President of Corporate Affairs Lance Ignon.  “We assumed the risk would be related to drug development, not the government’s behavior.”

Washington also rejected a radiation treatment developed by drug maker Hollis-Eden (see GSN, March 19), and chose a competitor’s smallpox vaccine over one produced by Acambis (see GSN, April 17).

One former government lawyer directed the blame toward poor management of biotechnology firms rather than the government.  “They wouldn’t survive in any other marketplace,’ the lawyer said (Salamander Davoudi, Financial Times, April 17).

The head of Hollis-Eden Pharmaceuticals Inc. and other biotechnology executives are scheduled to testify on Bioshield today before a House panel, according to the McClatchy Newspapers.  Testimony is also expected from top HHS officials and the head of the National Institute of Allergy and Infectious Diseases.

According to prepared testimony, Hollis-Eden chief executive Richard Hollis plans to tell lawmakers that the company “will never again seek to work with the government.”

Legislation that revamped Bioshield, allowing for companies to receive funding during the drug development process and creating the Biomedical Advanced Research Development Agency (see GSN, Dec. 20, 2006), “will only make things worse” by increasing the tax burden on the U.S. people “with no guarantee of the results,” Hollis is expected to say (Greg Gordon, McClatchy Newspapers, April 17).

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