Select Subcommittee Hearing Exposes Emergent BioSolutions’ Failure to Perform on $628 Million Contract Granted by Trump Administration

May 19, 2021
Press Release
Subcommittee Members Call on Company to Return Wasted Funds as CEO and Executive Chairman Apologize for Some Failures While Minimizing Responsibility

Washington, D.C. (May 19, 2021) – Today, the Select Subcommittee on the Coronavirus Crisis, chaired by Rep. James E. Clyburn, held a hybrid hearing with Emergent BioSolutions, Inc.’s (Emergent) President and Chief Executive Officer, Robert G. Kramer, and Executive Chairman, Fuad El-Hibri. The hearing was related to an ongoing investigation, conducted jointly with the Committee on Oversight and Reform, into the company's failure to address serious manufacturing problems leading to the destruction of millions of coronavirus vaccines, lucrative vaccine manufacturing contracts awarded by the Trump Administration, and other businesses practices that have strained federal resources for many years.

 

“Emergent’s failures are disappointing precisely because these vaccines are so effective.  Because the company was unable to deliver, the vaccinations of millions of people around the world have been delayed, putting their lives at needless risk,” Chairman Clyburn said during the hearing.  “We need you to do better.  We need you to do a better job cleaning your facilities and training your staff.  We need you to recognize that inspections by the FDA, your partners, and your own auditors are vital to helping Emergent be successful, and we need you to take their recommendations seriously and fix the problems they identify.”

 

Chairman Clyburn called on Emergent to return public funds wasted as a result of the company’s failures, including amounts spent on doses that have been destroyed due to contamination and on testing needed to confirm that other doses are safe to use. Chairman Clyburn said to “repair this breach of public trust, Emergent must consider returning those wasted public funds.”

 

Witnesses provided the following additional testimony during the hearing:

 

Emergent Executives Apologized and Admitted Some of Their Failures

  • Mr. Kramer admitted responsibility for Emergent’s manufacturing failures and apologized to the American people after the Food and Drug Administration shut down Emergent’s manufacturing.  He said, “No one is more disappointed than we that we had to suspend our 24/7 manufacturing of new vaccine.  As CEO, I take full responsibility for that.”
  • Mr. El-Hibri said:  “Let me be clear, the cross-contamination event is unacceptable, period.”

 

CEO Robert Kramer Confirmed that $628 Million Trump Administration Contract Allowed Emergent to Collect $27 Million Per Month from Taxpayers Regardless of Manufacturing Activity

  • When asked by Congresswoman Maxine Waters whether Emergent was paid $27 million per month despite not manufacturing any vaccines in certain months, Mr. Kramer said:  “I believe we were, yes.”
  • When Congresswoman Carolyn Maloney asked Mr. Kramer if the company has delivered any usable coronavirus vaccines in the United States in return for its $628 million contract, Mr. Kramer admitted:  “None of the vaccine that we’ve manufactured has been made available to the U.S.”

 

Emergent Executives Minimized the Multiple Instances of Vaccine Contamination that Occurred Under Their Watch While Acknowledging Prior Awareness of Risks

  • Mr. Kramer attempted to portray the series of contamination events that destroyed millions of doses of AstraZeneca vaccines in the Fall of 2020 as routine, saying:  “There were a number of contaminations while we were starting up the AstraZeneca manufacturing process, which you would normally find.”   
  • Despite apologizing in opening remarks for “the failure of our controls,” when later asked by Congressman Jamie Raskin whether the company’s work had been a failure, Mr. Kramer said, “I don’t agree that it was a failure,” and described the company’s work as “extraordinary.”
  • When asked by Congressman Bill Foster if Emergent was aware of the risk of cross-contamination before the company began manufacturing vaccines, Mr. Kramer conceded:  “It is a well-known risk that if the precautions are not taken, there is a likelihood of cross-contamination.”

 

Executives Expressed Lack of Knowledge Regarding Key Details of Major Contamination Events

  • Mr. Kramer explained that the cross-contamination of up to 15 million doses of Johnson & Johnson vaccines occurred when materials being transferred out of an area of the facility used to produce AstraZeneca vaccines came into contact with media used to prepare Johnson & Johnson vaccines, but said:  “[W]e don’t know exactly how the virus of the AstraZeneca product was transferred into the media, but somehow it was.”
  • Mr. Kramer was unable to answer a question from Chairman Clyburn regarding the number of Johnson & Johnson vaccines that were lost as a result of cross-contamination, saying:  “I can’t specifically comment on the number of doses.”  He further said: “I can’t give you an exact number of doses that were lost of the AstraZeneca product.”

 

CEO Robert Kramer Defended and Refused to Return Large Cash Bonuses Awarded for Work Performed in 2020

  • Despite claiming to take responsibility for Emergent’s failures and apologizing to the American people, when asked by Congressman Raja Krishnamoorthi if he would commit to returning the $1.2 million bonus that he received for “extraordinary performance” in 2020, Mr. Kramer stated:  “I will not make that commitment.”
  • Mr. Kramer also defended a $100,000 “special bonus” for work “related to COVID-19” that was awarded in February 2021 to the Emergent executive responsible for manufacturing during the coronavirus, saying that the executive’s work “was incredible.”

 

Emergent Committed to Cooperating Fully with the Joint Investigation Conducted by the Select Subcommittee and the Committee on Oversight and Reform

  • Mr. Kramer committed to providing all documents requested in the ongoing joint investigation into Emergent conducted by the Select Subcommittee and the Committee on Oversight and Reform.  When asked by Congresswoman Maloney if each would commit to testifying again in the future, Mr. Kramer said, “Yes, I will,” and Mr. El-Hibri said, “I do commit.” 

 

Today, Chairman Clyburn, and Rep. Carolyn B. Maloney, Chairwoman of the Committee on Oversight and Reform, released a staff memo identifying initial findings discussed during the hearing and releasing new documents obtained in the Committees’ ongoing investigation into Emergent.  Click here to read today’s memo.

 

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Issues: 
117th Congress