Friday, October 15, 2021

Vaccinator made record profit, but disappointed

Following the award of the no-bid contract to Emergent, the Trump administration returned to the traditional contracting rules and sought competitive proposals for additional bottling and packaging, known in the industry as fill-finish, the documents show. Ology Bioservices, based in Alachua, Florida, has agreed to provide essentially the same services as Emergent’s Camden and Rockville plants for three-quarters to nearly one-third of the cost, according to a contract-based calculation.

Under an agreement reached in August, Ology will charge the government fees equal to $ 6.83 per vial. By comparison, Emergent’s existing lines will cost between $ 9.03 and $ 18.40 per bottle.

A health department spokesman said Ology is in part cheaper because it can bottle more than 100,000 bottles in a single batch, as many as five times that Emergent can handle. It “lowers the price per bottle by spreading the fixed cost over more bottles,” she said in an email.

Even after the Ology was deployed, the government continued to negotiate with Emergent at a higher cost to ensure that “additional capacity is available if or when it is necessary to refill vaccines or medicines,” she said. Former and current federal officials said the government wanted to acquire as much manufacturing power as possible at the time of the contract before commercial enterprises would renovate it.

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Over the years, Emergent has grown by allowing the government to fund expansions of its manufacturing sites and accumulate reserves of its products.

In November 2019, the company announced a plan to double its revenue, in part through the expansion of its contract manufacturing business. A senior vice president, Syed Husain, outlined a “game plan” that would include “cross-selling of additional services” to existing clients including the federal government. Six months later, Emergent entered into the agreement that broadened his existing government contract to include work at the Camden and Rockville sites.

Dr. Robert Kadlec, a former Trump administration official who oversaw the agency that awarded Covid-19 contracts, previously worked as a consultant for Emergent. Dr. Kadlec said he did not negotiate the Emergent deal, but did approve it. Emergent said he was negotiating the deal with career government officials.

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