Executives defend quality control at troubled COVID-19 vaccine plant

Some lawmakers seek an end to Emergent's federal contracts

Rep. Mariannette Miller-Meeks (R-IA) listens as Robert Kramer, president and CEO of Emergent BioSolutions, speaks via videoconference during the hearing on the company's handling of COVID-19 vaccines.   (Stefani Reynolds/Getty Images/POOL)
Rep. Mariannette Miller-Meeks (R-IA) listens as Robert Kramer, president and CEO of Emergent BioSolutions, speaks via videoconference during the hearing on the company's handling of COVID-19 vaccines. (Stefani Reynolds/Getty Images/POOL)
Posted May 19, 2021 at 4:52pm

Executives at a vaccine contractor responsible for contaminating millions of vaccine doses defended its manufacturing quality Wednesday, even as new revelations emerged about the company’s lapses in sanitation, the role of a top Trump administration official in its COVID-19 contracts and their own bonuses.

Emergent BioSolutions, a pandemic preparedness company that received billions in federal investments over the years, was contracted by Johnson & Johnson and AstraZeneca to make the active ingredient in their vaccines. But no COVID-19 vaccine manufactured by the company has been distributed for use in the United States.

Emergent BioSolutions received $671 million total in federal money in 2020 for COVID-19 vaccines and medicines, in addition to the lucrative contracts with Johnson & Johnson and AstraZeneca. While ramping up production of those vaccines, the company cross-contaminated millions of doses.

An investigation by the House Select Subcommittee on the Coronavirus Crisis revealed that Emergent’s manufacturing issues came to light last spring in multiple inspections, and though the company told federal regulators it would remediate those issues, they continued as the company took on the task of producing COVID-19 vaccines.

The ramifications of the mix-up are vast. Sixty million AstraZeneca vaccines that the Biden administration committed to countries abroad remain in limbo. States across America are not receiving Johnson & Johnson vaccines needed to reach the country’s homeless and homebound citizens, among others, and 15 million Johnson & Johnson shots were tossed out.

The company is working with the Food and Drug Administration on the inspection of its troubled plant and millions of vaccines that remain idle.

Emergent recently submitted its response to the FDA's April 20 inspection, a necessary step for freeing up the 60 million imperiled doses. Emergent CEO Robert Kramer said at the subcommittee's hearing Wednesday that the FDA has had the necessary data to potentially authorize the doses for “a week or two.”

Just how much the company’s problems have shaken up global vaccine supply remains unclear.

Kramer did not directly answer questions from subcommittee Chairman James E. Clyburn, D-S.C., on how many doses remain under inspection by foreign regulators. Those doses are unable to be committed to countries facing a crush of COVID-19 surges.

Kramer and Emergent Chairman Fuad El-Hibri defended the company by emphasizing the challenge of ramping up manufacturing in a once-in-a-century pandemic.

“I think it was widely acknowledged by Emergent as well as our network of partners that there was inherent risk of bringing both vaccines into our facility and ramping them up very quickly,” Kramer said.

Democrats' criticism

But Democrats hammered the company for being repeatedly cited both by the FDA and its partners, Johnson & Johnson and AstraZeneca, for problems with sanitation, poorly trained personnel and a lack of proper oversight. The committee cited FDA inspections, company documents and news reports.

The committee’s investigation found that Emergent was cited for manufacturing issues on multiple occasions last year, including by a top Trump administration official, both before and after its June 2020 $628 million contract from the federal government specifically for the COVID-19 vaccines.

Before the widely reported February 2021 cross-contamination incident, the company also spoiled millions of AstraZeneca COVID-19 vaccine doses in separate incidents in October 2020 and December 2020 by using equipment with bacterial contamination, according to The New York Times.

In response to a 2020 inspection, Emergent told the FDA that “sudden scale-up to full-scale manufacturing activities for two different Covid-19 vaccine drug substances” contributed to “a dramatic increase in storage and staging demands,” and that manufacturing capacity was “strained,” according to a company document the committee obtained that the FDA recently released.

Oversight and Reform Chairwoman Carolyn B. Maloney, D-N.Y., sought to frame the issues at Emergent as endemic to the company, citing El-Hibri’s testimony to Congress in the 1990s about a subsidiary’s production and pricing of an anthrax vaccine, a key driver of sales for Emergent before the COVID-19 pandemic.

“There’s a pattern here,” Maloney said, questioning why the government keeps awarding the company contracts. “This is unfair to the American taxpayer.”

The investigation also revealed that $542 million of the $628 million contract with the government is devoted to simply reserving manufacturing space, and is awarded regardless of how many vaccines it makes. That means taxpayer funds continued to flow to the company, even though no Emergent-made shots have been administered in the U.S.

That contrasts with contracts between the same agencies and Emergent’s partner, Johnson & Johnson, which only receives payment if vaccines are delivered.

Questions swirled about the company's ties to Robert Kadlec, who earned $360,000 as an Emergent consultant before President Donald Trump tapped him to oversee the Office of the Assistant Secretary for Preparedness and Response.

Among the documents the committee published as part of its investigation: A memo Kadlec signed asking for a priority rating for Emergent’s COVID-19 contract — which allowed the government to bypass Emergent's private competitors and freed up Emergent to focus on producing COVID-19 vaccines.

Still, Kramer denied knowing anything about a direct role that Kadlec played in the company’s federal contracts.

Kramer emphasized that the company’s dealings were with career contract officials at the Biomedical Advanced Research and Development Authority, an agency that falls under ASPR.

Rick Bright, former head of BARDA, criticized Kadlec in a May 2020 whistleblower complaint for pressuring the agency to award contracts to personal acquaintances.

El-Hibri and Kadlec have business ties beyond Kadlec’s consulting work, which The Washington Post reported in May 2020.

El-Hibri told the committee he was in contact with Kadlec “four or five times” while Kadlec held his government role.

Maloney also criticized Kramer for the timing of certain stock sales in January and February 2021, before Emergent’s issues were publicly known.

Maloney also questioned Kramer’s decision to cash out $10 million in stock earlier this year, before its stock crashed to half its prior price.

“Instead of thinking of ways to address your company’s contamination, you were thinking of ways to enrich yourself,” she said.

Rep. Bill Foster, D-Ill., asked Kramer whether it was Emergent or Johnson & Johnson that detected a component of the AstraZeneca vaccine in their shots.

“Where was the laboratory that first detected the contaminated batch?” Foster asked. “Was it your internal [quality assurance] laboratory process? Or was it that of your customer?”

“The particular assay in the location of the work that detected the contamination was the [Johnson & Johnson] facility in Liden,” Kramer said, casting the Johnson & Johnson inspection as part of Emergent’s quality control.

Republican members remained largely unengaged with Emergent during the hearing, instead devoting their time to pushing the majority party to hold hearings on the impact of an intellectual property waiver for COVID-19 vaccines or the potential that the pandemic originated from a Wuhan lab.

GOP members cast both the Biden administration’s support for lifting patents on COVID-19 vaccines and the Emergent investigation as undermining pharmaceutical innovation.

“Democrats hate bonuses. I mean they hate them. They hate when innovation is rewarded. They prefer equity in outcomes,” said Rep. Mark E. Green, R-Tenn.

Investigation continues

The FDA has emphasized that the problems with Emergent did not jeopardize the safety of COVID-19 vaccines currently being distributed and administered.

By the time FDA inspectors arrived at the plant in mid-April, Emergent had halted production.

A spokesperson for the FDA emphasized that Emergent-made vaccine won't be released “until we feel confident that it meets our expectations for quality.”

The FDA spokesperson said the agency is working with Johnson & Johnson and AstraZeneca “to come to resolution on the disposition of the products.”

Meanwhile, Emergent’s relationship with other federal agencies could be in peril.

Government contracts comprised $988.5 million of the company’s income last year, according to the committee — about 63 percent of the company’s revenue.

Kramer told investors in April that the company’s connections in Washington are still strong.

“We’ve been at this for 22 years as a company. We pride ourselves on open, transparent relationships. And we’ve found that to be the case for the last 22 years as well as [in] the current circumstances,” Kramer said.

But skeptics are calling for an end to the company’s federal contracts.

“We know enough about Emergent not to trust them,” said Rep. Maxine Waters, D-Calif. “Why would we continue to deal with a company that has violated the contract in so many ways, that has a dirty facility?”

Waters also mentioned the potential for executives being “sued or jailed” for the manufacturing issues and criticized the sale of stock before production issues with vaccines were publicly known.

The committee’s investigation is continuing. Maloney said there are outstanding documents requested by the committee’s investigators that Emergent did not deliver by the panel's deadline, and asked Kramer to testify before the committee again.

Kramer agreed.