Monday, November 14, 2011

And the hits just keep on coming...

2012 can't get here fast enough for the Obama administration. It seems that every week brings out another scandal, of one form or another.

This week, it's a a drug scandal involving another big-time Obama campaign donor. LA Times writer David Willman lays it all out.

The short version: the government has awarded a no-bid contract to a drug company--whose principal shareholder is Ronald Perelman--to manufacture a Smallpox drug that may not work and is unlikely to ever be needed.

Currently, the U.S. holds enough Samllpox vaccines in storage to inoculate the entire U.S. population. This is, some might say, kind of overkill, given that the past reported case of Smallpox was in 1977 and the WHO certified the disease as eradicated in 1979. But there is a fear that samples of the disease still in existence could be used as biological warfare agent. Thus, nations like the U.S. keep quantities of the Smallpox vaccine in storage. Luckily, the vaccines keep for quite a while--decades, according to Willman's story--so the cost is not what it might be.

However, the vaccine only works--and we know it does work--if it can be given within four days of infection. thus, distribution of the vaccines could become a problem if an epidemic was underway.

Enter Siga and Perelman.

Under Bush, Project Bioshield was launched to make sure the nation was prepared for biological threats from terrorists or other nations. Smallpox was and is a chief concern in this regard. Perelman saw an oportunity, apparently, and bought up sufficient Siga stock to take control of the company and set it on a course to profit from the program.

What Siga has come up with is a pill that can treat people who have been infected with Smallpox past the four day window. And for this, Siga was awarded a contract to deliver 1.7 million doses at $255 per dose (that's over $433 million dollars). But to make that happen, the game had to be rigged in Siga's favor, as there was at least one competing company.

All the evidence currently shows that the Department of Health and Human Services has done everything it can do to make sure Siga gets the contract. And that--of course--is corruption. And cronyism.

Meanwhile, at Siga shareholders made a small fortune--those who were in the know, at any rate--since negotiations began. Siga stick (SIGA) over the last five years:

It's almost junk, now. And no doubt this story and the fallout will drive down even farther.

Cheers, all.

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