Thursday, October 23, 2014

SEIU’s Andy Stern and Pharma Company Faulted in Ebola Drug Shortage

Why hasn't the U.S. developed a more effective drug to combat Ebola?

According to an article by the Huffington Post’s Ryan Grim and Jeffrey Young, a "politically connected drug company" waged "a high-stakes battle for federal funding" several years ago and snatched up government money that otherwise would have gone to developing an “experimental drug now being used by the U.S. government to treat Ebola patients.”

What's the name of this "politically connected drug company"?

You guessed it. SIGA Technologies.

Here's what happened:

In 2010, the federal government awarded a nearly half-billion-dollar contract to SIGA (which was developing a drug “in case terrorists weaponized smallpox, a disease that was considered fully eradicated by the 1970s”) rather than awarding the money to Chimerix, which was developing "a broad-spectrum antiviral” medicine that the U.S. government is now using on an emergency basis during the Ebola outbreak.

The Chimerix drug “was given in the late stages to Thomas Eric Duncan, the Dallas patient who succumbed to Ebola in early October,” according to the Huffington Post.

The HuffPo article discusses the role of Andy Stern, SEIU’s President Emeritus, and his billionaire benefactor, Ron Perelman, in this tale of money, political deals and a lethal viral epidemic.
The bid for the potentially multi-billion dollar government contract was ultimately won by Siga Technologies Inc. in fall 2010. Just before the contract award, The Huffington Post reported that Siga had brought on board Andy Stern, who had recently departed as head of the Service Employees International Union. Having been the lead labor negotiator on the Affordable Care Act, Stern knew his way around the Department of Health and Human Services, which was to award the contract. Stern and Ron Perelman, whose holding company had a potentially controlling ownership stake in Siga, had long been on friendly terms, having become close after negotiating union contracts when Stern was a labor leader.
After the story, Siga threatened to sue HuffPost for reporting Perelman's ownership, which the company said did not amount to a controlling stake. It was a critical distinction, because Siga had bid for the contract as a small business. Chimerix Inc., the rival bidder, challenged the awarding of a $2.8 billion contract, arguing that Siga was not a small business, as the contract required, because it was controlled by MacAndrews & Forbes Holdings, the massive company solely owned by major Democratic donor Perelman.
In November 2010, the Small Business Administration ruled that Siga was in fact controlled by Perelman's company and voided the contract. (Siga did not sue HuffPost and declined to comment for this story; the law firm that wrote the letter threatening the suit is now listed as an unsecured Siga creditor.)…
Instead of reopening the bidding, the Biomedical Advanced Research and Development Authority, or BARDA, asked Siga simply to submit a sole-source bid -- one that no other company could apply for, arguing that Siga was the only company capable of meeting the criteria.
SEIU's Andy Stern
Of course, SEIU’s Stern has a long and storied connection to Perelman.

When Stern was the President of SEIU, he abandoned thousands of low-waged security guards at AlliedBarton after he allegedly cut a backroom deal with their boss, Ron Perelman, according to an earlier article by Ryan Grim in the Huffington Post. (“Andy Stern’s Bizarre Alliance with Private Equity and Biowarfare,” October 7, 2010)

Then, just weeks after resigning as president of SEIU, Stern was placed on SIGA’s Board of Directors where he apparently was enlisted to use his SEIU rolodex and Washington, DC political connections to "dial for dollars" on behalf of SIGA. 

SIGA’s CEO said the following about Stern in a press release:
Andy is a strong leader and a great addition to our Board of Directors. His insight, experience, and leadership, particularly his understanding of how our federal government works, will complement the skill sets of our existing board members.
SIGA then rewarded Stern with tens of thousands of shares of stock and hundreds of thousands of dollars of cash. SIGA reportedly mounted a full-court press for the half-billion-dollar federal contract, which later prompted investigations into illegal bid rigging by U.S. Senator Claire McCaskill (D-Mo.).

And those aren't the only questionable connections between Stern and his sugar daddy, Perelman. 

SIGA’s majority owner also created and funded a custom-made job for Stern – the Ronald O. Perelman Senior Fellow at Colombia University's Business School in NYC where Stern pulls down a handsome paycheck.

Last month, SIGA filed for bankruptcy after a Delaware court ordered it to pay damages of $232 million for ripping off another company.

Check out the HuffPo story here