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McCaskill seeks inquiry into $433 million contract for smallpox drug

This article first appeared in the St. Louis Beacon, Nov. 23, 2011 - WASHINGTON - Citing concerns about its cost and safety, U.S. Sen. Claire McCaskill, D-Mo., has asked federal inspectors to look into a $433 million, sole-source contract for an experimental drug against smallpox.

In a letter sent this week, McCaskill requested a review by the inspector general of the U.S. Department of Health and Human Services into the "circumstances surrounding the award of the contract, including whether it was reasonable in light of the risk of a smallpox outbreak and the reported shortfalls" of the vaccine.

McCaskill, who chairs the Senate subcommittee on contracting oversight, also questioned why the original contract had been awarded under a solicitation for small businesses, even though the firm -- Siga Technologies Inc. -- had too many employees to qualify as a small business. After protests from a competitor, the award was switched to a sole-source contract.

Questions about the five-year contract to New York-based Siga were first reported by the Los Angeles Times, which said the administration of President Barack Obama had "aggressively pushed" the vaccine plan despite doubts from some medical experts. Siga's controlling shareholder is a longtime Democratic political donor.

Even though smallpox has been eradicated in the environment, the virus is still considered to be a bioterrorism threat. The U.S. has about $1 billion worth of a smallpox vaccine in its strategic stockpile, but that vaccine must be given within four days of exposure to the virus to prevent death from the disease. Siga's antiviral drug, called AT-246, would be used to treat people that would not be helped by the vaccine.

The Los Angeles Times quoted Donald A. "D.A." Henderson, who led the World Health Organization's effort to eradicate the smallpox virus and later advised U.S. biodefense efforts, as questioning the need for the Siga drug. "We've got a vaccine that I hope we never have to use -- how much more do we need?" he said.

In a news release after the contract award last spring, Siga reported that AT-246 "is the only drug from any source" shown to be effective against the smallpox virus in animal models. It said that smallpox, while no longer present naturally in the environment, is "considered a formidable bioterrorism threat," and "there is currently no FDA-approved treatment" for people who have contracted the disease.

In her letter, McCaskill asked the HHS inspector to examine whether buying 1.7 million doses of the drug "was reasonable in light of the risk of a smallpox outbreak and the reported shortfalls" of the drug -- such as its cost, its shelf life, and the fact that "it is unknown whether this product is actually safe for human use."

The senator's concern about the shift of the contract from a small-business award to a sole-source contract stemmed from a subcommittee hearing she chaired in July that examined federal contracts intended for small businesses that, instead, were awarded to larger firms.

Rob Koenig is an award-winning journalist and author. He worked at the STL Beacon until 2013.