Bloomberg Businessweek - USA (2020-11-02)

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BloombergBusinessweek November2, 2020

in-depthwhitepapertoBarda

remindingtheagencyofevery-

thingthecompanycoulddo.

RickBright,whowasserving

asdirectorofBardaasthevirushittheU.S.,fileda whistle-

blowercomplaintearlierthisyearthatpainteda pictureof

a federalgovernmentthatwasslowtoactonvaccines.He

sayshewasoustedinAprilafterfightingpressuretoallow

useofhydroxychloroquine,ananti-malariadrugthatTrump

hadbeenpushingdespitethelackofrigoroustrialstoprove

it wassafeandeffective.InJanuary,Brightsays,hetriedand

failedtopersuadeKadlecandHHSSecretaryAlexAzartoallo-

catemoneyforCoviddruganddiagnosticsdevelopment.Ina

writtenstatement,theHHSsaidthatfromhisposition,Bright

couldn’t know

everything being

donetocombatthe

pandemic.Bright

didn’trespondto

requestsforcom-

mentforthisstory.

Barda pressed

aheadonCovidanyway.InJanuarytheagencycontacted

Johnson& Johnsontodiscussusingthesameapproachfor

thenovelcoronavirusthatit hadusedforitsEbolavaccine,

recallsStoffels,thechiefscientificofficer.“Weknowthetech-

nologyyouhaveis developedandyoucanscaleit,”herecalls

Bardaexpertssaying.OverthreemeetingsinWashingtonin

February,Stoffelssays,thecompanyandBardacameupwith

a developmentplan.Asit hammeredouttheinitialcontract,

J&JbegantalkingtoEmergentaboutlockingupmanufacturing

capacity.OnMarch30,HHSannounced$456millioninfunds

tosupportclinicaltrialsandmanufacturingofJ&J’seventual

candidate,followedbyanadditional$483millionforModerna.

InApril,Emergentsignedaninitial$135millionagreementto

manufactureJ&J’svaccine,withsomeworkstartingin 2020

andlarge-scaleproductionbeginningin2021.

Bymid-April,dailydeathsfromCovidweresurging,and

thepressuretoactwasgrowing.HHSofficialswerefleshing

outhowtosetupOWS.Thedecisiontocreatea newbody

strucksomeasanunnecessarygimmick,giventherewere

existinginteragencystructuresinplacethatthegovernment

usedtorespondtoEbola.

AlthoughOWSwasn’tformallyannounced

untilmid-May,HHSandtheDODstartedlay-

ingthegroundworkbyinterviewingasmany

as 10 peoplefortheroleofchiefadviser.

Azar,DefenseSecretaryMarkEsper,andWhiteHouseadviser

andTrumpson-in-lawJaredKushnerinterviewedSlaouiand

decidedhewastherightpersonforthejob.HejoinedOWSas

anoutsidecontractorinsteadofasagovernmentemployee,

which meant he wasn’t subject to federal ethics rulesregard-

ing disclosure and divestment of shareholdings thatmightcon-

flict with his role. Slaoui agreed to work for OWS fora nominal

$1 salary, with his expenses covered under an HHScontract

awardedtoAdvanceDecisionVectorsLLC,based

inAlexandria,Va.,whichis handlingcompensa-

tionforseveralOWSconsultants.

Slaouihascomeunderfirefromcongressio-

nalDemocrats,whosayhehastoomanyconflictsofinter-

estwithOWScompanies.Hevociferouslydeniesthat.(He

sayshe’sa registeredDemocratwhojoinedOWSbecausehe

believedfindinga vaccinewasmoreimportantthanpartypol-

itics.)AfterheadingvaccinesatGlaxoSmithKline,he’dtaken

boardseatsatModernaand,briefly,theSwissdrugmanu-

facturerLonzaGroupLtd.,Moderna’svaccinemanufacturer

ofchoice.WhenheagreedtojoinOWS,heresignedfrom

LonzaandModernaandpromisedtosellallhisModerna

shares.Heinsistedonkeepinghismultimillion-dollarstake

inGlaxo,whichhe’scalledhis“retirement,”butpledgedto

donateanygainstotheNationalInstitutesofHealthfromthe

dayhestartedatOWS.Hesayshewasn’tinvolvedinnegotiat-

ingthedealswithModernaortheSanofi-Glaxopartnership.

“Istayedcompletelyoutof

it,”Slaouisays.

OnJuly2,FrancisCollins,

theNIHdirector,andGary

Disbrow,actingBardadirec-

tor,testifiedonOWSbefore

Congressbutrefusedtoprovidedetailsonhowthepro-

gramwouldpickvaccinestofund.Atthatpoint,OWShad

announced$1.2billionforAstraZeneca’svaccinedeveloped

withtheUniversityofOxford.Democratsaskedhowmany

vaccinesit wouldback.“Morethanone,”Disbrowsaidwith

a chuckle.“I’msorry—itreallyis procurementsensitive.”

Overthenextsixweeks,OWShandedcontractsworth

morethan$8billionto backfiveadditional vaccines—

thosefromJohnson& Johnson,Moderna,Novavax,Pfizer,

andSanofijointlywithGlaxo.Thegovernmentreluctantly

releasedsomeofthecontracts—heavilyredacted—overthe

summerinresponsetoFreedomofInformationActrequests.

Slaouisaysthefussis unnecessary:“Theyareplain-vanilla

contracts.There’snothingspecialaboutthemapartfromthe

amountofmoney,whichrelatestothecostofdevelopingthe

vaccines.”Inmid-October,theadvocacygroupPublicCitizen

filedalawsuitdemandingthereleaseofcoronavirusvaccine

contracts.InlateOctober,HHSreleaseda Modernacontract,

heavilyredacted.

OWSdealshaveledtoa hugepaydayformany

pharma executives.Moderna executivesnet-

teda profitof$115.5millionfromsellingshares

intheircompanyfromMay 15 toAug.31,accord-

ingtoAccountablePharma,a nonpartisanwatchdoggroup.

AModernaspokesman said thesharesales weredone

throughpreviouslyscheduledprogramsandinaccordance

withinsider-trading regulations. Emergent executives net-

ted$5millionsellingsharesduringthesameperiod,and

inSeptemberthecompany’sexecutivechairman,Fuad

El-Hibri,soldanadditional80,000sharesfora netprofitof

$8.1million. Emergent said in a statement that executives

Pfizer with BioNTech

$1.95b

Operation Warp Speed Vaccine Investments

Moderna

$2.5b

AstraZeneca

$1.2b

Johnson & Johnson

$1.5b

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