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Bribery & The Incompatibility Of Barely Regulated Capitalism And Free-Wheeling Democracy

No one involved in any capacity with a company likes seeing a headline like the one from BusinessWire above. But let's look at this one a little more closely.

The pharmaceutical industry is always near the top of any list pertaining to legalistic bribes to federal elected officials. The industry usually gives around $30 million annually to keep members of Congress on their side, although the amount varies. The biggest year for Big PhRMA bribes was 2014, when the amount spent on bribes-- just the ones reported-- went over $50 million. Most of the money goes to Republicans since, essentially, there are no Republicans who won't sell their votes. There are some Democrats who don't. The ones who do (most of them) get as much in PhRMA bribes as Republicans do. Last year the industry swung substantially towards the Democrats. Contributions totaled $31,311,707 for Democrats and $16,780,462 for Republicans. Democratic senators took an average of $133,254 from the pharmaceutical donors and Democratic House members averaged $38,141 each. Republican senators averaged $105,272 and GOP House members averaged $30,913.

If a dozen members of the House should be incarcerated for taking bribes (last cycle) from PhRMA, here's the list:

  • Kevin McCarthy (R-CA)- $455,166

  • Steve Scalise (R-LA)- $280,687

  • Richard Hudson (R-NC)- $275,980

  • Frank Pallone (D-NJ)- $256,925

  • Anna Eshoo (D-CA)- $248,350

  • Scott Peters (New Dem-CA)- $229,973

  • Kevin Brady (R-TX)- $218,000

  • Brett Guthrie (R-KY)- $210,464

  • Richard Neal (D-MA)- $206,500

  • Buddy Carter (R-GA)- $185,200

  • Larry Bucshon (R-IN)- $184,254

  • Brad Schneider (Blue Dog-IL)- $175,599

Nice hauls for one cycle, huh? And these aren't random people the industry is beings generous to. These are the men (and woman) who protect the industry in committees and set policies favoring the companies and disadvantaging the public. That's why I mentioned incarceration, although Congress defines "bribery" specifically to exclude the behavior of nearly all its members. Is there anyone who doesn't know that the pharmaceutical companies are buying off politicians and that there are clear links between that money, that influence peddling, and the country’s extremely subpar response to the pandemic and to the general health and finances of Americans?

Let's focus on one company that has been in the news recently-- and not in a good way-- Emergent Biosolutions. The company was founded 22 years ago by economist Fuad El-Hibri, now the executive chairman of the board. The CEO is Robert Kramer. Headquartered in Gaithersburg, Maryland, Emergent employs 1,834 people and had $1.11 billions in revenue last year. The company develops vaccines and antibody therapeutics for infectious diseases and opioid overdoses (Narcan) and provides medical devices and antidotes for biowarfare.

Thru a company PAC, Emergent directs its bribery to both parties, although, again, more to Republican crooks than to Democratic crooks. El-Hibri personally has given to both parties but all of his biggest contributions-- those over $10,000-- were to the GOP:

  • NRCC (2017)- $25,000

  • NRCC (2014)- $22,400

  • NRCC (2020)- $20,000

  • NRCC (2011)- $20,000

  • NRCC (2013)- $19,800

  • NRCC (2016)- $19,600

  • NRCC (2006)- $15,000

  • NRCC (2018)- $14,600

  • NRCC (2019)- $14,400

The most El-Hibri ever contributed to an individual candidate directly was $4,000, not to a Republican but to Chris Van Hollen (D-MD). Over the years, he's maxed out to dozens of corrupt members of Congress, overwhelmingly Republicans, but always to Van Hollen as well. Last cycle, the company PAC's biggest single recipient was one of Congress' most bribe-happy members, Steny Hoyer ($10,000), although 4 anti-healthcare Republicans were right behind him.

Emergent has been closely-- and undeniably-- linked with the country’s shortage in ppe from the beginning of the pandemic and with the country’s underwhelming vaccination quality and progress-- all with virtually no meaningful congressional oversight. How is that possible? Paid off friends in high places... and on both sides of the aisle.

From the start of the pandemic, more people have been getting sick and dying because of the lack of ppe and because of the vaccination debacle-- two issues that Emegent Biosolutions is at the heart of. Emergent signed a $135 million deal with Johnson & Johnson to provide and reserve manufacturing capacity for J&J's vaccine. Their East Baltimore factory was given $163 million from the US government to make upgrades in order to increase production of vaccines and therapies, including both the Johnson & Johnson and AstraZeneca COVID-19 vaccines. The plant experienced multiple production issues, and audits in 2020 from several institutions, including internal audits from Emergent, as well as external ones from AstraZeneca, Johnson & Johnson, and U.S. federal government agencies identified issues with deficiencies in employee training, cross-contamination, improper disinfection, and inadequate testing of raw materials. Due to issues with contamination or suspected contamination at the plant between October 2020 and January 2021, 2-3 million doses of AstraZeneca vaccine had to be thrown out, and improper manufacturing of cells in November 2020 caused a batch of Johnson & Johnson vaccine to be thrown out. Later, in March 2021, workers at the Baltimore plant conflated the ingredients of two COVID-19 vaccines, ruining about 15 million doses of Johnson & Johnson's vaccine, and causing them to be discarded. The mix-up, which federal officials attributed to human error, delayed future shipments of the vaccine.

The NY Times updated an exhaustive April 6th Emergent story by Chris Hamby, Sharon LaFraniere and Sheryl Gay Stolberg yesterday. "More than eight years ago," the 3 investigative reporters wrote, "the federal government invested in an insurance policy against vaccine shortages during a pandemic. It paid Emergent... to have a factory in Baltimore always at the ready. When the coronavirus pandemic arrived, the factory became the main U.S. location for manufacturing Covid-19 vaccines developed by Johnson & Johnson and AstraZeneca, churning out about 150 million doses as of last week. But so far not a single dose has been usable because regulators have not yet certified the factory to allow the vaccines to be distributed to the public. Last week, Emergent said it would destroy up to 15 million doses’ worth of the Johnson & Johnson vaccine after contamination with the AstraZeneca vaccine was discovered. Emergent and government health officials have long touted their partnership as a success, but an examination by the New York Times of manufacturing practices at the Baltimore facility found serious problems, including a corporate culture that often ignored or deflected missteps and a government sponsor, the Biomedical Advanced Research and Development Authority, that acted more as a partner than a policeman."

Previously undisclosed internal documents and interviews with current and former federal officials and former company employees depict a factory operation that was ill-equipped to take on such a mammoth manufacturing task, despite Emergent’s having received a $163 million federal contract to improve the facility and prepare it for high-volume production.
...While the Baltimore plant remains under scrutiny, another 62 million doses of the Johnson & Johnson vaccine made there are in jeopardy until it can be determined whether they were also contaminated.
...Emergent is a longtime government contractor that has spent much of the last two decades cornering a lucrative market in federal spending on biodefense. The Times reported last month that sales of its anthrax vaccines to the Strategic National Stockpile accounted for nearly half of the stockpile’s half-billion-dollar annual budget throughout most of the last decade, leaving the federal government with less money to buy supplies needed in a pandemic.
...[A]n Emergent spokesman, Matt Hartwig [said] “Any allegation that our safety, quality and compliance systems are not working or that we do not take these responsibilities seriously is false.”
But four former company officials, speaking on the condition of anonymity because they had signed nondisclosure agreements or feared retaliation, described an environment where top Emergent leadership tolerated and even encouraged the flouting of federal standards for manufacturing and marketing products.
One of the former officials said that as the company scrambled to meet the heavy demands of vaccine production, a senior manufacturing supervisor often responded to reports of quality errors by asking: “Do you want me to make drugs or fix issues? I don’t have time to do both.”

Meanwhile, Kramer's compensation was growing astronomically-- up from $3.7 million in 2019 to $5.6 million for 2020 including $893,860 in annual salary, a $1.2 million bonus, $2 million in stock awards and $1.4 million in stock options. His annual salary will rise to an even million this year.

Two weeks ago Greenbelt Mayor Colin Byrd, sent a letter to Hoyer, Van Hollen and the state's other senator, also a big recipient of Emergent generosity, Ben Cardin. He wrote, in part, to urge them "to support congressional investigations into the U.S. Health and Human Services Department’s regulation of and spending with Emergent Biosolutions and Johnson and Johnson, as well as the related factory mix-up that ruined 15 million vaccine doses from Johnson and Johnson."

When 15 million vaccine doses get ruined causing delays in vaccine doses in a global pandemic, “oops” is not an acceptable answer.
While federal officials have attributed the mistake to mere “human error,” it definitely appears that the quality lapses associated with this mistake were avoidable and that Emergent Biosolutions, Johnson and Johnson, AstraZeneca, the FDA, and the federal government as a whole could have and should have done much more to prevent this from happening. Workers confused ingredients from the coronavirus vaccines of Johnson and Johnson and AstraZeneca-- ingredients that are not interchangeable-- and this confusion raises questions about training and supervision. The mistake went undiscovered for days, and, by the time it was discovered, 15 million doses were contaminated. At Johnson and Johnson’s $10 a dose price for the finished product, the value would be around $150 million. And, by the way, the deal that Emergent Biosolutions had with Johnson and Johnson and AstraZeneca was worth $740 million. But, even prior to this mistake, Johnson and Johnson had already faced a lag in manufacturing that caused the company to fall behind on its commitments to the federal government.
Moreover, Emergent had many previous FDA violations.

The FDA had previously cited Emergent for violations and expressed various concerns about the company and Byrd cited poorly trained employees, cracked vials, problems managing mold and contamination, quality standards of vaccine batches, data integrity, date manipulation, testing and lab procedures, violation of sterility protocols... Byrd also wrote that he has "concerns about Emergent Biosolutions’s lobbying for contracts with the federal government’s emergency health stockpile. The company put an 'extraordinary burden' on the federal government’s Strategic National Stockpile, according to Dr. Richard Hatchett, a public health adviser to former President Barack Obama. This burden contributed to the shortage of lifesaving medical equipment, like ventilators and masks, and, by extension, to America’s failed response to the coronavirus. The burden hurt health workers and hospitals. As covid-19 spread, the virus caused deaths, and overwhelmed hospitals, and devastated people who could not get masks or other medical supplies. Part of the reason for that had to do with Emergent’s extraordinary share of the National Stockpile’s budget."

Meanwhile, Emergent Biosolutions had been profiting handsomely from selling anthrax vaccines to the National Stockpile, America’s emergency medical reserve, and those profits came at the price of the stockpile -- and the federal government in general -- not spending enough money on preparing for and responding to issues related to infectious diseases like the coronavirus.
● In 2020, as covid-19 spread across the U.S., the federal government spent $626 million with Emergent on products including vaccines to fight anthrax.
● In 2016, the federal government increased its spending with Emergent by $100 million to provide the company with the sales it needed to stay in business.
● Last year, Emergent Biosolutions had record revenues of $1.5 billion, including from anthrax vaccines, smallpox vaccines, and coronavirus vaccines.
● In 2020, the founder and chairman of Emergent Biosolutions cashed in on shares and options of $42 million.
● In 2015, the federal government approved a plan to buy tens of millions of N95 respirators, lifesaving equipment that has been in short supply for medical workers because of covid-19, but the masks repeatedly lost out on funding between then and 2020. Meanwhile, over that same time period, the federal government spent $1 billion with Emergent Biosolutions on anthrax vaccines.
● In the months prior to the covid-19 pandemic, the federal government awarded Emergent Biosolutions $3 billion in long term contracts.
● In 2020, the federal government bought Emergent’s unlicensed anthrax vaccine, relying on emergency authorization.
● From 2010 to 2018, the federal government spent over 40% of its roughly $560 million annual stockpile budget on Emergent’s anthrax vaccine.
● Over the years, the federal government has spent more and more for doses of Emergent’s anthrax vaccine.
...The people of Maryland and the people of America deserve to know how and why the federal government spent so many federal taxpayer dollars with Emergent. The people need to know about the lapses in regulation and in accountability related to the spending. And the people need to know how the federal government will ensure more prudent spending and hold contractors more accountable in the future.
The bottom line is this: “Oops” is not good enough. Not when so many Prince Georgians, Marylanders, and Americans as a whole have struggled to get the vaccine.
The fact of the matter is that 15 million doses were ruined by a company that the federal government knew had major issues when it came to training, supervision, record keeping, testing, and prevention of contamination and mix-ups.

Byrd is running for the U.S.Senate seat currently held by Emergent's top congressional ally, Senator Chris Van Hollen (D-MD), taker of bribes, protector of criminal corporations.

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