How Emergent BioSolutions Earned Profits But Delivered Disappointing Vaccine Returns

After awarding Emergent the no-bid contract, the Trump administration reverted to traditional contracting rules and sought competitive proposals for additional bottling and packaging, known in the industry as fill-finish work, the documents show. Ology Bioservices, based in Alachua, Fla., agreed to provide essentially the same services as Emergent’s Camden and Rockville plants for three-quarters to nearly one-third of the cost, according to a calculation based on the contracts.

Under an agreement reached in August, Ology would charge the government fees equating to $6.83 per vial. By comparison, Emergent’s existing lines would cost it between $9.03 and $18.40 a vial.

A health department spokeswoman said Ology was cheaper in part because it can bottle more than 100,000 vials in a single batch, as much as five times what Emergent can handle. That “lowers the per vial price by spreading the fixed costs over more vials,” she said in an email.

Even after bringing on Ology, the government has continued its agreement with Emergent, at the higher cost, to ensure “additional capacity is available if or when needed to fill vaccines or therapeutics,” she said. At the time of the contract, former and current federal officials said, the government wanted to secure as much manufacturing power as possible before commercial ventures snapped it up.

Over the years, Emergent has grown by getting the government to fund expansions of its manufacturing sites and amass reserves of its products.

In November 2019, the company announced a plan to double its revenue, in part by expanding its contract manufacturing business. A senior vice president, Syed Husain, outlined a “game plan” that included “cross-selling additional services” to existing customers, including the federal government. Six months later, Emergent struck the deal that broadened its existing government contract to include work at the Camden and Rockville sites.

Dr. Robert Kadlec, a former Trump administration official who oversaw the agency that awarded Covid-19 contracts, had previously worked as a consultant for Emergent. Dr. Kadlec has said that he did not negotiate the Emergent deal but did approve it. Emergent said it negotiated the agreement with career government officials.