Problematic Protection

Corporate Research E-Letter No. 32, February 2003


by Mafruza Khan

Among the many fears gripping Americans these days is that the Iraqi government or al Qaeda may launch an attack in the United States or against U.S troops abroad using a biological weapon such as anthrax. In theory, military personnel are protected. Since 1998, the Department of Defense (DoD) has been requiring members of the armed forces to be given an anthrax vaccine. But since the inception of the program, there have been questions about the safety and efficacy of the vaccine, as well as the integrity of the company that is the sole licensed producer of the medication.

From A State-Owned Enterprise to a Privately-Held Company

That company is privately-held BioPort Inc. of Lansing, Michigan. BioPort was conceived in 1998 by retired Admiral William Crowe and Fuad El-Hibri, a German-born Lebanese businessman, to take over the assets of Michigan Biologic Products Inc. (MBPI). In 1970, MBPI, the last state government owned vaccine manufacturer in the country, received the only U.S. license to produce the anthrax vaccine. When MBPI ran into financial difficulties, Michigan officials decided to put it up for sale.

That was the perfect opportunity for El-Hibri, who had served as CEO of the British company Porton International, which had made a fortune selling anthrax vaccine to countries like Saudi Arabia during the Gulf War. Crowe, a long-time friend of El-Hibri's father, had served as Chairman of the Joint Chiefs of Staff under Ronald Reagan. He was later appointed ambassador to Britain during the Clinton administration, when concerns about Iraq's production of anthrax were mounting in the U.S. after the Gulf War. 

BioPort Inc. paid $24 million for MBPI amid opposition from some state politicians, including former Michigan state senator Linng Brewer, who questioned the terms and conditions of the deal. Opponents charged that the price was too low and raised questions about the fact that two former MBPI managers became partners in BioPort.

BioPort's privatization of MBPI was supposed to have solved a host of operational problems that had plagued the company under state government ownership. But during the late 1990s BioPort repeatedly failed U.S. Food and Drug Administration (FDA) inspections, prompting the agency to prohibit the company from producing any new vaccines until it corrected problems with the quality of its vaccines and its accounting procedures. In September 2000 the company was cited for using an expired lot of the drug.

BioPort finally received FDA approval in January 2002 to begin shipping the vaccine. By this time, faced with dwindling supplies, the Pentagon had to scale back its immunization program by vaccinating only military personnel in high-risk areas.

Elusive Profits and Pervasive Subsidies

According to a 2001 report, despite El-Hibri's experience marketing anthrax vaccine for Porton, Crowe's strong ties with the defense establishment, and growing interest from the Pentagon in protecting troops from anthrax, BioPort's owners' plans to make a killing from the deal did not come to fruition. It was hard for them to anticipate the financial and regulatory woes that would beset the company.

BioPort had originally been awarded a $29.4 million DoD contract to supply 8.7 million doses of anthrax vaccine at the price of $4.36 each. But in 1999, the company got a $24.1 million bailout from the DoD. This included an increase in the price per dose from $4.36 to $10.64 and a reduction in the number of doses by about 30 percent. The Pentagon also agreed to advance BioPort $18.7 million to help it cover its debts. The new agreement increased the cost of the contract for the Pentagon to $49.8 million over the following five years. The government has reportedly spent more than $120 million of taxpayers' money to keep the company afloat.

Acknowledging its problems with BioPort, DoD said in 2000 that it was working to reduce its reliance on the company by seeking to identify a second source for manufacturing the anthrax vaccine that could share the product license with BioPort.

AVIP (Anthrax Vaccine Immunization Program) - A Controversial Program

Also at issue is the larger question of the efficacy of the vaccination effort itself. Touted initially by defense officials as a strategic response to the threat of germ warfare, it has been mired in controversy over its safety, effectiveness and appropriateness.

In 2001, Air Force Captain John E. Buck, became the first doctor to be court-martialed for refusing the anthrax vaccine. Buck and former Air Force officer, Major Sonnie Bates, filed suit in the U.S District Court for the District of Columbia on May 3, 2001 asking that the vaccine be declared an experimental drug and thus prohibited without service members' informed consent. Named as defendants in the suit are Defense Secretary Donald Rumsfeld, Health and Human Services Secretary Tommy Thompson, Bernard A. Schewtz, the FDA's acting principal deputy commissioner and BioPort Inc.

Ever since the DoD launched its Anthrax Vaccine Immunization Program (AVIP) in 1998, it has been a source of heated debate. The military insists that it is the best weapon against biological attacks. A 2002 report by the Institute of Medicine, a council of scientists and doctors set up by Congress to advise the government, said the vaccine was acceptably safe.

Opponents include more than 1,500 service people who have complained about side effects of varying severity, from cramps and rashes to loss of memory. The anthrax vaccine has been attributed as a potential cause or contributing factor in Gulf War veterans' illnesses. The death of a former employee of BioPort in 2000 was also linked to his taking doses of the vaccine while being employed at the company. 

The vaccine's most vocal critic is Dr. Meryl Nass, a recognized authority on the military use of anthrax vaccine and a member of Physicians for Social Responsibility. Nass and others say that the vaccine was tested only on animals and that clinical studies on humans, as required by the FDA, were never conducted. The anthrax vaccine was licensed in 1970 after studies showed it protected textile mill workers against cutaneous anthrax, the least fatal form of anthrax, when they handled contaminated fur or hides. A 1995 memo from the director of a medical biological defense research program said that the vaccine was not licensed for aerosol exposure, the most fatal form, expected in a biological warfare environment. 

Responding to service members' complaints of program insensitivity to adverse health effects, inadequate medical record keeping and heavy-handed program operation, the House Government Reform Committee initiated an oversight investigation into the design and implementation of the DoD's AVIP program in 2000. The report concluded that the vaccine should be considered investigational when used for biological warfare defense. Then Committee Chair, Representative ChrisTopher Shays (R-Conn) commented, "As the program heads toward almost certain collapse, we have even more reason to be critical of DoD and FDA for coddling the vaccine maker, BioPort. We've known for some time that DoD was propping up a company and a vaccine that would otherwise never survive scrutiny by the FDA or the commercial marketplace."

To Vaccinate or Not to Vaccinate

Other strategies beside the vaccine approach are available. According to Dr. Nass, during the Gulf War, the French forces elected not to use vaccines as a primary defense against anthrax. Instead, they used prophylactic antibiotics to counter Iraqi biological warfare agents and depended on protective suits to counter Iraqi chemicals. The French Armed Forces were the only nation in the Coalition Forces that did not report any cases of Gulf War illnesses. A May 1999 Air Force Times cover story also says that gas masks and antibiotics can provide protection.

The Institute of Medicine concludes in a 1998 report, "The U.S. should place greater priority on developing, manufacturing and stockpiling an improved anthrax vaccine." An estimated 20 companies, including BioPort, federal organizations and universities are working toward a possible next generation vaccine, which reportedly may or may not be more effective. One of these companies is Dynport Vaccine Co., a joint venture of defense contractor DynCorp and El-Hibri's former employer Porton International.

For this round of the proposed war against Iraq, 46 percent of those offered the shot in Great Britain, the U.S's staunchest ally, have refused it. Britain does not force any medicine on its soldiers or civilians, a practice that dates back to the Hippocratic oath. The DoD has already forced more than a half-million soldiers to take the vaccine in the U.S. 


Representative Shays' comment sums up the foolishness of our government's proclivity to bail out companies like BioPort. Given the lack of scientific data on the effectiveness of the anthrax vaccine and the actions of military personnel affected by the program, the U.S. government, like its allies, should consider available alternatives such as antibiotics and gas masks. The Defense Departments' doctors and scientists should also revisit the Hippocratic oath.



Summary of House Government Reform Committee Report

BioPort Inc.

 Institute of Medicine