Feds Cancel $628M Deal With Vaccine Maker

The federal government's contract with vaccine manufacturer Emergent BioSolutions has been canceled—and as with the end of many troubled relationships, there's disagreement over who decided to call it quits first. Emergent CEO Robert Kramer said Thursday that the government "agreed to the company's request to end our 9-year pandemic manufacturing partnership," per the Baltimore Sun. A senior administration official, however, tells the New York Times that the Department of Health and Human Services decided to end the contract and set up the termination so it would not face legal challenges from Emergent.

The politically well-connected company was awarded a $163 million contract to expand a Baltimore plant in 2012 and prepare to produce vaccines quickly in response to new viruses, per the Times. But when the COVID-19 pandemic hit and it received a $628 million contract under the Trump administration's Operation Warp Speed, it had major production problems, the Washington Post reports. The plant, which had a history of quality control issues, was producing doses of the Johnson & Johnson and Astrazeneca vaccines, but 15 million J&J doses had to be destroyed in March after the batch was contaminated with Astrazeneca ingredients. The government then directed J&J to take charge of the facility, and it detected issues that led to another 60 million doses being discarded in June.

The plant was shut down for months and the government stopped making payments to Emergent, which says it will forego around $180 million with the deal's termination. The company—which faces a shareholder lawsuit and a congressional investigation of the COVID vaccine issues—says it plans to offset the lost revenue with gains in areas including anthrax vaccines, the Sun reports. Kramer acknowledged that the company had faced "challenges" manufacturing the vaccines, but said the federal government had failed to deliver on a promise to provide it "with the necessary drug development work to build and maintain those capabilities." (More Emergent BioSolutions stories.)