WASHINGTON — The federal government has canceled its contract with a troubled Covid-19 vaccine manufacturer that ruined millions of doses and had to halt production for months after regulators raised serious quality concerns.
The decision marks a stark reversal of fortune for the politically connected contractor, Maryland-based Emergent BioSolutions, and an abandonment by the government of a deal that was supposed to be a centerpiece of Operation Warp Speed.
Early in the pandemic, the government decided to bank on the company to be the sole domestic manufacturer of the Johnson & Johnson and AstraZeneca vaccines. But this March, testing found that a batch of the Johnson & Johnson vaccine had been contaminated, and Emergent agreed to pause manufacturing after an inspection uncovered a host of problems at its facility in Baltimore’s Bayview area.
The termination of the contract, disclosed on Thursday by Emergent executives during a call with investors, was the result of negotiations that began after the government earlier this year stopped making payments under the deal, which was awarded in May 2020 and was worth more than $600 million. Emergent will now forgo roughly $180 million of that amount, according to company disclosures.
The Baltimore Sun that the health department had agreed to Emergent’s “request to end our 9-year pandemic manufacturing partnership.”
Mr. Kramer laid blame on the government, even as he conceded that “not everything went perfectly” during the pandemic. “But if you want companies to engage,” he wrote, “you need to be willing to stand by them through both challenge and achievement.”
a government assessment warned that relying on the largely untested facility was risky.
Mr. Kramer on Thursday said a lack of experience at the factory was attributable in large part to a lack of consistent government funding over the years. “The necessary operational investments by all administrations fell short of what was needed to maintain capability in case of an emergency,” he said.
Since May, Emergent has said it expected federal regulators to soon certify vaccine production at the Baltimore plant. But regulators have yet to issue that certification, although they have certified Johnson & Johnson’s manufacturing operation in the Netherlands as well as plants that produce vaccines for Pfizer-BioNTech and Moderna vaccines.
Instead of giving the Bayview plant a green light, the F.D.A. cleared multiple batches of AstraZeneca’s and Johnson & Johnson’s vaccines — and then only after special scrutiny, because of the plant’s problems. A batch can include as many as 15 million doses.
The cancellation appears to have no impact on the availability of coronavirus vaccines in the United States. The contract only involved production of AstraZeneca’s vaccine, which is not authorized for distribution in the United States.
Although Johnson & Johnson, one of only three federally authorized vaccines here, produced tens of millions of doses at the Baltimore plant, it did so under a separate contract with Emergent as its subcontractor.