WASHINGTON – The executive director of Emergent BioSolutions, whose Baltimore facility ruined millions of coronavirus vaccine doses, announced on Wednesday that more than 100 million doses of the vaccine were being put on hold by Johnson & Johnson as regulators screen for possible contamination.
In more than three hours of testimony before a House subcommittee, chief executive Robert G. Kramer calmly acknowledged unsanitary conditions, including mold and peeling paint, at the Baltimore plant. He acknowledged that Johnson & Johnson had discovered – not emergent – contaminated cans and fought off aggressive questions from the Democrats about his stock sales and hundreds of thousands of dollars in bonuses for company executives.
Emergent’s Bayview Baltimore facility shut down a month ago after contamination spoiled the equivalent of 15 million cans. However, Mr. Kramer told the legislature that he expected the plant to resume production “in a few days”. He said he took “very seriously” a report from federal regulators that identified manufacturing defects and assumed “full responsibility”.
“Nobody is more disappointed than us that we had to stop manufacturing new vaccines around the clock,” Kramer told the panel, adding: “I apologize for the failure of our controls.”
Mr Kramer’s appearance before the House Select Coronavirus Crisis Subcommittee, which has launched a full investigation into his company, provided the public with an initial glimpse into the men who run Emergent, a politically affiliated federal entrepreneur who has a niche market for the Biological Defense Preparation dominates with the US government as the main customer.
Mr. Kramer, who testified virtually, was assisted by Fuad El-Hibri, the company’s founder and chairman, who has grown from a small biotech company to a $ 1.5 billion company in annual sales over the past two decades has expanded. Executive compensation documents released by the subcommittee show that the company’s board of directors praised Mr. El-Hibri, who cashed in more than $ 42 million in stock and options last year, for “his critical relationships with important customers, Congress and other stakeholders. ”
Those members of Congress include Representative Steve Scalise of Louisiana, the No. 2 Republican in the House, and the Chief Republican on the House subcommittee. Federal campaign records indicate that Mr. El-Hibri and his wife have donated more than $ 150,000 to groups associated with Mr. Scalise since 2018. The company’s Political Action Committee has donated approximately $ 1.4 million to members of both parties over the past 10 years.
Mr El-Hibri expressed his remorse on Wednesday. “The cross-contamination incident is unacceptable,” he said.
Mr. Kramer’s estimate of 100 million cans held increased the number of Johnson & Johnson cans effectively quarantined due to regulatory concerns about contamination by 30 million. Federal officials had previously estimated that the equivalent of about 70 million cans – most of them for domestic use – could not be released until purity was tested.
The House Democrats began their investigation into Emergent after the New York Times documented months of problems at the Baltimore plant, including failure to properly disinfect equipment and protect it from viral and bacterial contamination.
Hours before the hearing began, the committee’s staff released confidential audits previously reported by The Times that cited repeated violations of manufacturing standards. A leading federal manufacturing expert reiterated these concerns in a June 2020 report, warning that Emergent did not have trained staff and adequate quality control in place.
“My teenage son’s room gives your facility a run for its money,” Representative Raja Krishnamoorthi, Democrat of Illinois, told Mr. Kramer.
Mr. Kramer initially stated that the contamination of the Johnson & Johnson cans “was identified by our quality control procedures and checks and balances.” However, when questioned, he admitted that a Johnson & Johnson laboratory in the Netherlands had picked up the problem. Johnson & Johnson hired Emergent to manufacture its vaccine and is now claiming greater control over the facility at the urging of the Biden government.
The federal government placed a $ 628 million contract with Emergent last year, primarily to reserve space at the Baltimore plant for vaccine manufacturing. The legislature is examining, among other things, whether the company is maintaining its contacts with a leading representative of the Trump administration, Dr. Robert Kadlec, used to secure this mandate and whether federal officials have ignored known shortcomings in placing the work on Emergent.
Mr El-Hibri told lawmakers that the government and Johnson & Johnson are aware of the risks.
“Everyone was open-minded that this is a facility that has never manufactured a licensed product before,” he said. While the Baltimore plant was “not in perfect working order – far from it,” he argued that the plant was “in the highest state of readiness” among the plants that the government had to choose from.
For Republicans, including Mr Scalise, Wednesday’s session became a means of defending Emergent and the Trump administration and raising other virus-related issues: the unproven theory that the coronavirus leaked from a laboratory in China that “Lies of the Communist Party” of China “, mask mandates and the demand of the Biden government for a renunciation of an international agreement on intellectual property.
“You are a reputable company that did Yeoman’s job protecting this bio-defense country,” exclaimed Mark E. Green, Republican of Tennessee, adding, “So you have your people a bonus for their incredible work given. “
Emergent is able to work in Washington. The board of directors is made up of former government officials, and Senate lobbying data shows the company has spent an average of $ 3 million a year on lobbying over the past decade. That’s roughly the equivalent of two pharmaceutical giants, AstraZeneca and Bristol Myers Squibb, whose annual sales are at least 17 times higher.
Democrats urged Mr. Kramer and Mr. El-Hibri to open their contacts with Dr. Kadlec, who had previously consulted for Emergent. Documents indicate that Emergent agreed to pay him $ 120,000 annually for his advisory work between 2012 and 2015 and that he recommended that Emergent be given a “priority rating” so that the contract can be approved quickly. Dr. Kadlec said he didn’t negotiate the deal but signed it.
“Did you or any other Emergent executives speak or make contacts with Dr. Kadlec while these contracts were being issued?” Representative Nydia M. Velázquez, Democrat of New York, asked Mr. Kramer.
“Congressman,” he replied cautiously, “I haven’t had any discussions with Dr. Kadlec about it.”
The government has paid Emergent $ 271 million to date, although American regulators have not yet approved a single dose of vaccine made in the vaccine in Baltimore.
An investigation by the Times found that Emergent was an oversized influence on the Strategic National Stockpile, the country’s emergency medical reserve. In a few years, the company’s anthrax vaccine made up half of the inventory budget.
The investigation found that some federal officials believed the company was undermining taxpayers – an issue that also surfaced at Wednesday’s hearing when New York Democrat Carolyn B. Maloney asked how much it would cost to make the vaccine and what he sells for. Mr. El-Hibri promised to provide the information later.
Company executives also consider their coronavirus work to be one of the “main drivers” of 2020 revenue, according to a memorandum released Wednesday by committee staff. Executives have been rewarded for what the company’s board of directors calls “exemplary overall company performance for 2020 , including a significant overachievement of the sales and earnings targets ”.
Mr Kramer received a $ 1.2 million cash bonus in 2020, the records show, and this year also sold $ 10 million worth of shares in stores that he said were planned in advance and dated Companies have been approved. Three of the company’s executive vice presidents received awards between $ 445,000 and $ 462,000.
Sean Kirk, who is responsible for overseeing development and manufacturing processes at all Emergent production sites, received a special bonus of $ 100,000 last year in addition to his regular bonus of $ 320,611, including for expanding the contract manufacturing capacities of the Company to Covid- 19 show the documents. Mr. Kirk is now on personal vacation.
Aspiring officials “appear to have wasted tax dollars while filling their own pockets,” accused Ms. Maloney.
Mr Krishnamoorthi asked Mr Kramer if he would consider giving his bonus to American taxpayers.
“I will not make this commitment,” replied Mr. Kramer.
“I didn’t think so,” replied Krishnamoorthi-san.
Rebecca R. Ruiz contributed to the coverage.