House panel wants more details on smallpox drug contract

Reporting from Washington —  The House Energy and Commerce Committee is scrutinizing the award by the Obama administration of a $433-million sole-source contract for an experimental smallpox drug.

In a letter sent Tuesday to Health and Human Services Secretary Kathleen Sebelius, committee Chairman Fred Upton (R-Mich.) and three of his Republican colleagues requested documents related to the awarding of the contract this year to Siga Technologies Inc., based in New York City. Siga’s controlling shareholder is Ronald O. Perelman, a longtime Democratic Party donor.

The congressional letter focuses in part on the actions taken by a presidential appointee, Dr. Nicole Lurie, who heads biodefense planning under Sebelius. The letter requests records on discussions that Lurie had regarding the procurement, or about smallpox in general, with Sebelius and unspecified White House officials.

In addition, the letter asked the secretary to “include all documentation and communications discussing how this contract would eventually be valued at $433 million.”

In raising a question about the cost of the contract, the committee leaders cited a Dec. 24, 2008, letter from two senior George W. Bush administration officials to the Office of Management and Budget that estimated the cost of buying a smallpox antiviral would be $215 million.

The Los Angeles Times reported last month that after Siga’s chief executive complained in April about the Health and Human Services Department’s “approach to profit” while negotiating the price for the experimental drug, Lurie told him that the department would install a new contract officer. In May, the department awarded the final contract to Siga.

Lurie has said the contract was awarded based strictly on merit.

The contract calls for Siga to supply 1.7 million treatment courses of its drug to the government’s stockpile within five years. The drug, called ST-246, would be used to treat people who were diagnosed with the infection too late to be helped by the smallpox vaccine.

The congressional letter also centers on Health and Human Services’ rationale for expecting that Siga’s drug would be approved by the Food and Drug Administration. The drug’s standing is important because the contract requires Siga to develop ST-246 “for ultimate approval” by the agency.

Last week, an FDA advisory committee met for two days to review studies in animals of ST-246 and another company’s antiviral. At the conclusion, Dr. Debra Birnkrant, director of the agency’s antiviral products division, announced that she would confer with her subordinates and with “upper management” to assess the status of Siga’s drug.

Other documents sought by the congressional committee concern why the stockpile contract was originally advertised for small businesses but ultimately was awarded based on other criteria.

In October 2010, Health and Human Services first awarded the contract to Siga but dropped the small-business requirement — after the company was found to be too big to qualify. In February of this year, officials prevented further competition by seeking a proposal for the contract only from Siga.

The House committee also is asking Health and Human Services for its rationale that smallpox is an ongoing threat to the United States. The virus was eradicated worldwide as of 1978, and is known to exist only at a Russian scientific institute and at the Centers for Disease Control and Prevention in Atlanta.

Dr. Donald A. “D.A.” Henderson, who led the eradication of smallpox and later served as a bioterrorism advisor in the Bush administration, said he did not view smallpox as an imminent menace.

“As a threat, it’s way down the list,” Henderson said in an interview after serving as an appointee to the FDA advisory committee meetings.

In addition to scrutiny from House Republicans, at least one Democrat, Sen. Claire McCaskill of Missouri, has raised questions about the $433-million contract. McCaskill last month asked Health and Human Services Inspector Gen. Daniel Levinson to examine the matter.

david.willman@latimes.com