Biodefense Cronyism and Corporate Welfare



In the aftermath of the Solyndra cronyism debacle, the Los Angeles Times now reports that a no-bid contract was awarded last May to a firm controlled by a billionaire Obama supporter for the highly unlikely national security threat of a small pox attack:

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.

The resulting cost of the Siga vaccine is $255 per dose. Meanwhile, the Times notes that:

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. . . .

In addition, none other than Andy Stern, former SEIU President and close Obama associate (and member of President Obama’s National Commission on Fiscal Responsibility and Reform) just happens to sit on the Siga Board of Directors.

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