|
 On March 6, 2020, the Biomedical Advanced Research and Development
Authority called on pharmaceutical and medical device companies to
develop a vast array of essential COVID supplies.
Known as BARDA, a program within the Department of Health and Human
Services, the authority sought vaccines, testing devices, treatments
and other products. BARDA, created in 2006 to help companies develop
medical supplies to address public health threats, made clear in its
call for proposals it was seeking products to be made at U.S.
facilities with a track record of meeting Food and Drug
Administration manufacturing standards.
Yet a majority of more than 50 companies so far selected to develop
and manufacture supplies in the United States did not meet those
standards, according to a Reuters examination of FDA records and
dozens of federal contracts issued by HHS under the $60 billion
COVID program.
In all, less than 20% of the companies awarded fast-track contracts
examined by Reuters were experienced manufacturers with a clean FDA
record for their U.S. plants in the two years prior. Four of every
five either had no U.S. manufacturing experience, poor domestic
inspection results or serious recalls before their COVID contract
awards, Reuters found.
“These are red flags,” said Peter Lurie, a former FDA associate
commissioner who is now president of the Center for Science in the
Public Interest. “The government ought to be able to find companies
in this country that aren’t tainted by previous poor performance.”
HHS, which oversees both the FDA and BARDA, said it takes “our
responsibility as stewards of tax dollars very seriously,” and that
it has an “outstanding” record of conducting contract due diligence.
Texas-based Luminex, a unit of Italy’s DiaSorin SpA, is one example
of a company recruited to the COVID fight while under FDA scrutiny.
In February 2020, the FDA found serious manufacturing problems at
its plants in Austin, Texas, and Northbrook, Illinois, FDA records
show.
A month later, the company was awarded the first of five COVID-19
contracts worth a total of nearly $19 million for new tests that
would be manufactured at the Austin facility, BARDA records show.
Luminex said the government contracts helped it address a vital
pandemic need and that the problems didn’t impact its COVID tests.
Other companies recently had product recalls that were designated as
“Class 1” by the FDA, signaling a serious risk to health or even
death.
One was Smiths Medical, a unit of Britain’s Smiths Group Plc,
awarded a $20 million contract from BARDA in July 2020 to expand its
U.S. plant in New Hampshire to produce syringes. In the years
before, Smiths Medical had issued serious recalls involving 20
different devices, including two devices that received Class 1
recalls.
Smiths Medical said it takes immediate action when an issue is
identified. “While accelerating our operations to produce this
critical equipment, safety and quality have remained our top
priority,” the company said.
The FDA found “objectionable conditions” at three U.S. plants
operated by contract drugmaker Catalent Inc in 2018 and 2019 but
allowed the company to address them without the agency taking
action. They included an Indiana vaccine facility that was cited
both years. The same plant was later contracted to produce COVID-19
shots for Johnson & Johnson and Moderna Inc.
Catalent said it “takes these observations very seriously and all
observations are addressed.” The company said it is on track to
deliver over one billion COVID vaccine doses globally by year’s end.
The manufacturing problems have persisted since the COVID contract
awards. At least 21 of the companies reviewed by Reuters have
initiated serious product recalls of their COVID supplies or
received poor inspection results from the FDA at the plants where
they were expected to expand manufacturing to fulfill the government
contract. While there have not been reports of patient injury or
death, the manufacturing issues have delayed vaccines and treatments
and affected the accuracy of diagnostic tests.
As Reuters reported in May, Eli Lilly and Co delayed manufacturing
of its COVID antibody treatment amid problems at the plant producing
it, after HHS agreed to pay it up to $1.2 billion. Separately,
Emergent BioSolutions Inc’s $628 million government contract was
canceled in November after the company struggled to manufacture
COVID vaccines.
STEEP DROP IN INSPECTIONS
The COVID contracting spree, which began under former President
Donald Trump and has continued under the Biden White House, came as
FDA domestic inspections fell precipitously. The Biden
administration has outlined its ambitions for investing billions
more dollars into expanding the U.S. manufacturing base for COVID
vaccine production.
What has not been spelled out is how pandemic-era manufacturing
quality is being evaluated. Leading into the pandemic, FDA
inspections of U.S. plants producing prescription medicines and
medical devices had dropped almost 25% between 2011 and 2019, FDA
inspection data show; the numbers don’t include pending inspection
reports or inspections prior to a product approval. Domestic
inspections were further curtailed by COVID restrictions during the
pandemic, dropping almost 64% in 2020 and almost 80% in 2021 from
the previous peak in 2011, records show.
“As a country we need people to trust the quality of our vaccines,
medical devices and medicines,” said Madris Kinard, a former FDA
public health analyst. “But the state of affairs when it comes to
oversight of any of these companies right now is really worrisome.”
HHS declined to answer questions about specific COVID suppliers’
compliance or performance. The department wouldn’t make its experts
available for interviews. BARDA, an office of HHS, said it couldn’t
comment without agency approval.
The FDA said it “cannot comment” on contract decisions made by BARDA,
as the agency said it generally did not participate in discussions
about such contracts in order “to avoid any appearance that
procurement or investment considerations may influence the FDA’s
regulatory decision-making.”
The FDA said the drop in domestic inspections can be explained in
part by a 2012 statute change that allowed it to prioritize
facilities based on risk. As a result, the agency was no longer
required to inspect U.S. facilities on a specific timetable and
could focus on those with more regulatory problems, including plants
abroad. The FDA said the numbers don’t reflect other ways it
monitors companies for manufacturing problems and that it has begun
to increase domestic inspections.
“We try to prioritize surveillance inspections by risk,” FDA Acting
Commissioner Janet Woodcock told Reuters. “We don’t inspect a plant
every time a new product is added. We may have recent inspection
data that showed everything was ok, we may have data from another
regulatory authority, we may have done a remote assessment.”
But the federal agencies sometimes operate in a vacuum. In response
to Reuters’ questions, HHS said BARDA considers publicly available
information about a manufacturer’s track record under federal
procurement regulations, but that nonpublic interactions between a
company and the FDA are considered trade secrets.
“Companies’ historic interactions with the FDA are considered
commercial confidential and since these activities were conducted
prior to U.S. government funding, we can encourage but cannot
require the companies to provide those previous interactions,” HHS
said. The agency said it requires companies to share such
information after a contract award as it relates to the actual
product.
Using the Freedom of Information Act, Reuters asked HHS for any
records related to BARDA’s interactions with the FDA or performance
assessments before or after contract awards. HHS said no records
were found.
“If they don’t have records,” said former FDA official Kinard, “then
how can they claim they did any performance assessments? Did they
even talk to the FDA?”
TINY OFFICE, TALL TASK
At its inception, BARDA was set up not as an official agency, but as
a program overseen by HHS’s Assistant Secretary for Preparedness and
Response (ASPR).
The ASPR office, which wields a nearly $3 billion budget, and BARDA
work together to promote the research and development of medical
supplies. They aim to “reduce the time and cost,” in ASPR’s words,
of developing products by funding and helping U.S. biomedical
companies navigate what the office called the Valley of Death, or
the late stage of development where products have “languished or
failed” before regulatory approval.
When the pandemic hit, BARDA’s plea for assistance from
manufacturers was met with applications by hundreds of companies,
many of which had little experience interacting with the FDA, said
two government officials involved in the process who spoke on
condition of anonymity.
HHS experts rushed to familiarize themselves with the newer firms,
and cold-called companies they had already worked with during
previous outbreaks to supplement the applicant pool, the two
officials said. BARDA was tasked with choosing manufacturers who
could produce COVID supplies inside the United States, whenever
possible. HHS was so swamped with proposals it also asked the
Pentagon to help.
Very quickly, the contracting process became controversial.
[to top of second column] |
 BARDA experts were reviewing
company proposals for COVID products submitted
through its own website. A second channel, set
up by Trump’s ASPR appointee Robert Kadlec and
run by his office, was also researching
potential suppliers.
In April 2020, Kadlec moved to reassign BARDA’s
director, Rick Bright, a veteran government
health official. Bright fought back with a
whistleblower complaint that accused Kadlec of
ignoring FDA safety concerns and ousting him to
cover up the steering of contracts to political
allies. Bright, who has since settled with the
government, declined to comment.
Kadlec denied targeting Bright. But he said the
U.S. was overwhelmed by the need for supplies
during an emergency and that HHS agencies should
have better prepared the companies well before
the pandemic.
“What was intended was that the government would
help create these manufacturing capabilities
that would be robust and regularly tested,”
Kadlec told Reuters. “They were not robust. They
were not invested in and they were not regularly
tested. It was a shit show.”
Kadlec acknowledged the Trump White House meddled in some COVID-19
contract negotiations. “I would suggest to you that any president
facing re-election in his last year of his first term who also has a
major public health crisis would politicize the process,” he said.
“Obviously the Trump persona was a hell of a lot different than
other presidents, and that magnified the problem.”
For instance, he said White House officials directly negotiated a
$647 million ventilator contract with Dutch firm Philips NV that a
House subcommittee concluded overcharged the federal government by
hundreds of millions of dollars. The negotiations for this new COVID-related
contract included White House adviser and Trump son-in-law Jared
Kushner and White House trade adviser Peter Navarro, the inquiry
found.
The House report also concluded that HHS contract officers were
excluded from the talks until the last moment. “By then, the
generous terms of the contract had already been agreed to by the
White House,” the report said.
In an interview, Navarro confirmed he had a role in the ventilator
discussions. He said he regularly involved himself in COVID supply
discussions after meeting resistance from the FDA when he insisted
all the supplies should be manufactured in the United States. But he
disavowed responsibility for the cost. Instead, he blamed Philips,
which denied overcharging the government.
A Kushner representative declined to comment and a Trump
spokesperson did not respond to questions. In November, Trump told
Navarro to defy a subpoena issued by a separate House committee
investigating the COVID-19 response. Lost in the
public scandal were the manufacturing problems the FDA said it found
at a Philips ventilator plant in California. Three months before the
Trump administration embarked on negotiations, the FDA designated
the violations as serious enough to order the company to take
action. The agency also cited Philips for failing to give notice
that another ventilator model manufactured at the plant could “cause
or contribute to a death or serious injury,” according to the FDA’s
database.
HHS announced it accepted delivery of more than 12,000 of the
Philips ventilators before canceling the remainder of the contract
in September 2020, shortly after the House findings.
This past summer, Philips issued a Class 1 recall of 15 million
sleep devices and ventilators amid concern a polyester-based
polyurethane foam could degrade “and be ingested or inhaled by the
user.” The company also recalled 22,300 ventilators in the U.S.
government’s stockpile due to problems with pressure levels when the
devices were used on infants and children; Philips said the recalled
products, which included all 12,000 ventilators sold to the
government for COVID, are being corrected with a software update.
“When issues arise, we work quickly to take action and focus on the
needs of our patients and the clinicians that serve them,” said
Philips spokesman Steve Klink. INSPECTIONS AND
CONTRACTS
Several companies were wrangling with the FDA over manufacturing
problems at the very time they were negotiating contracts with BARDA.
The FDA, for instance, finished inspecting Luminex’s Austin and
Northbrook plants on Valentine’s Day 2020 and found serious
manufacturing problems, according to a warning letter the agency
issued to the company four months later. The FDA designated the
problems as “Official Action Indicated,” a recommendation for
regulatory action.
The FDA also said in its warning letter that a Luminex testing
device, known as Verigene, failed to detect a patient’s superbug
infection. The patient did not receive appropriate treatment and
died two days later – possibly because of the test failure – the
warning letter states. The FDA said Luminex did not properly inform
the agency that it had removed the device from the market after the
incident, and that such violations could impact a company’s ability
to receive federal dollars.
Luminex told Reuters it had properly notified the FDA about what
happened to the patient and complied with additional FDA directives
over the matter.
The onset of the pandemic brought new opportunities for Luminex. In
March 2020, Luminex received FDA emergency authorization for use of
its new COVID-19 test kits. It vowed as a result to dramatically
expand manufacturing.
In 2020 and 2021, Luminex issued Class 2 recalls for its Verigene
diagnostics system over problems including possible inaccurate
results. This February, Luminex secured an $11.3 million contract
from the Biden administration, its largest to date.
In a statement, Luminex said BARDA’s support helped it boost
manufacturing capacity by 300% during the pandemic and quickly
produce “high-quality tests to meet the expanding need.”
Other test makers who received contracts had not operated a U.S.
plant previously.
Diagnostics company Ellume secured a $30 million contract in October
2020 under the Trump administration to develop at-home COVID tests
that were made in Australia. The Biden administration in February
awarded Ellume an additional $232 million, which the company said
will be used to build its first U.S. plant for future COVID
manufacturing.
In October 2021, the FDA issued a safety warning on certain lots of
Ellume’s COVID-19 home test because of the risk of false positive
results. The problems involved a “manufacturing issue,” the FDA
said. In November, the agency designated the company’s voluntary
recall as a Class 1, with 2 million affected tests.
“The FDA is not aware of any confirmed serious injuries or deaths
related to the false positive results with the affected Ellume
COVID-19 Home Tests at this time,” the FDA said in its safety
warning. The company said none of its tests now on store shelves are
affected by the recall. Its U.S. plant is expected to eventually
produce 15 million COVID tests per month.
Ellume told Reuters it “remains steadfast in its commitment to
deliver home tests to communities across the United States.”
Other companies also experienced problems after winning their
contracts.
Smiths Medical issued two separate major recalls for products, both
posing a risk of death, after being awarded its COVID-19 contract to
manufacture syringes. One involved syringes that could malfunction
and deliver too little or too much insulin to diabetes patients. The
other involved a device that could leach aluminum into the blood of
patients being treated for hypothermia.
Smiths said the recalled syringes used for insulin were manufactured
in the company’s New Hampshire plant but not associated with
COVID-19 vaccines. “The COVID-19 pandemic created unprecedented
staffing and supply chain constraints,” the company said. “The
incentive that BARDA provided allowed for expansion of our domestic
production.”
One company decided to cut its losses early when it became clear it
couldn’t deliver. John L. Warden Jr., CEO of the start-up Hememics
Biotechnologies, said his company could not develop its novel COVID
diagnostic device in time to meet the deadline set by Trump
officials.
“BARDA was doing its best but it was getting daily calls from the
White House. They were under enormous pressure,” Warden said. “We
were all told that our deadline was November 2020, and the fact that
it was around the election was not a coincidence.”
Hememics had been offered $600,000 by BARDA. In the end, it took
$25,000 of funding for development and turned down the rest so it
could have more time before it applies for FDA emergency
authorization.
“We were frankly too inexperienced at that point,” Warden said. “We
just needed more time.”
(Reporting by Marisa Taylor in Washington. Additional reporting by
Steve Holland. Editing by Michele Gershberg and Ronnie Greene.)
[© 2021 Thomson Reuters. All rights
reserved.] Copyright 2021 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.
Thompson Reuters is solely responsible for this content |
