Emergent BioSolutions officials pressed on vaccine production issues during congressional hearing

The congressional investigation into the company was launched last month.

May 19, 2021, 8:05 PM

In the face of a sprawling congressional inquiry and sustained scrutiny over its handling of a contract to help develop coronavirus vaccines, an executive of the beleaguered biotech firm Emergent BioSolutions told lawmakers on Wednesday that he hopes to resume vaccine production "in the coming days," pending FDA sign off.

The rosy outlook presented to lawmakers during Wednesday's congressional hearing by Robert Kramer, the Maryland-based company's CEO, stood in stark contrast to withering criticism delivered by congressional Democrats who advocated for the federal government to cut ties with the company.

"Why would we continue to deal with a company that has violated the contract in so many ways?" asked Rep. Maxine Waters, D-Calif. "They should be trying to prevent themselves from being sued, or being jailed, for what they have done."

Emergent has pointed to its longstanding record working with federal leaders of all political stripes, and has emphasized the urgency of the pandemic setting -- that the "rapid scale up of manufacturing had never been done before in the history of the planet," a spokesperson said previously told ABC News.

The House Select Committee on the Coronavirus launched a probe into Emergent last month after the company acknowledged what FDA investigators called "serious deficiencies" in Emergent's manufacturing that led to up to 15 million doses' worth of COVID-19 vaccine ingredients being compromised and disposed of because of cross-contamination.

PHOTO: Robert Kramer, President and Chief Executive Officer of Emergent BioSolutions, speaks via videoconference during a hearing on Capitol Hill in Washington, D.C., May 19, 2021.
Robert Kramer, President and Chief Executive Officer of Emergent BioSolutions, speaks via videoconference during a hearing on Capitol Hill in Washington, D.C., May 19, 2021. Emergent BioSolutions is a Maryland biotech firm whose Baltimore plant ruined millions of doses of the coronavirus vaccine.
Stefani Reynolds/Pool via AP

The one-dose Johnson & Johnson vaccine relies on an essential viral vector component manufactured by Emergent and other international facilities. Emergent is one of the few United States facilities capable of producing that crucial ingredient, and is the main U.S. supplier in Johnson & Johnson's U.S. production chain. Emergent was expected to deliver millions of doses' worth of that key ingredient -- but currently none of it can leave the company's Baltimore-area facility while production is paused due to cross-contamination issues.

Subcommittee chairman Rep. Jim Clyburn, D-S.C., pressed Kramer on the quality control at Emergent's facilities, which ABC News previously reported has been recurrently flagged by FDA investigators. Clyburn also pressed the executives on their plan to remediate specific problems flagged at their Baltimore-area Bayview plant.

"There were a number of steps that we suggested be implemented before we would resume production," Kramer responded. "We have made significant progress against all of those commitments. We are very close to completing them, and I would expect that we'll be in a position to resume production within a matter of days."

Ahead of the hearing on Wednesday, which featured Kramer and Emergent founder Fuad El-Hibri, the committee released preliminary findings from their investigation, which included scrutiny of the firm's ties to the Trump administration and bonuses paid out to executives, as well as the string of quality control issues found at the firm's Baltimore-area plant that led to the firm's current troubles.

"The committees' investigation raises troubling new questions about the lucrative contract Emergent received under the Trump Administration, the company's failure to address manufacturing problems that led to the destruction of millions of desperately needed coronavirus vaccine doses, and large bonuses paid to top executives despite these failures," according to a staff memo distributed ahead of the hearing.

The recent cross-contamination at the Baltimore plant is not the first time Emergent has had to answer questions about its quality control, however.

ABC News has previously reported on the company's longstanding quality control issues at multiple Emergent locations, itemized in federal inspection reports over the course of more than a decade, including leaks and cracks in critical equipment, mold, peeling paint, stained ceiling tiles, inadequate personnel training, and IT infrastructures left vulnerable to data compromise, which were observed by investigators on site and flagged for immediate fixing.

At Wednesday's hearing, Rep. Carolyn Maloney, D-N.Y., questioned Kramer about his stock sales and their suspicious timing in relation to the company's vaccine woes. As ABC News previously reported, between Jan. 15 and Feb. 8, Kramer made a series of stock transactions that netted him more than $7.6 million, securities filings show. The moves came just prior to revelations of the firm's troubles, which promptly sent the company's stock value tumbling.

PHOTO: Rep. James Clyburn speaks during a House Select Subcommittee on the Coronavirus Crisis hearing on Capitol Hill in Washington D.C., May 19, 2021.
Rep. James Clyburn speaks during a House Select Subcommittee on the Coronavirus Crisis hearing on Capitol Hill in Washington D.C., May 19, 2021.
Stefani Reynolds/Pool via AP

"That makes me think you were more interested in enriching yourself than serving the public," Maloney said.

Kramer responded that all of his stock sales "were made pursuant to a plan that was approved by the company and, importantly, was put in place during a quiet period that was also approved by the company."

An Emergent spokesperson previously said that Kramer's transactions were scheduled in November, long before they were executed -- a practice frequently used by corporate executives to avoid suspicion of trading on insider information, which is illegal.

In a private report in June of 2020, an adviser to the federal government's Operation Warp Speed identified key "risks" in relying on Emergent's Baltimore facility to handle vaccine ingredient production, saying that Emergent "will have to strengthen the change control process, systems audit trails, and quality oversight," which would "require significant resources and commitment."

Despite the litany of quality control issues, Emergent won a $628 million contract from the Trump administration in June of 2020 to boost domestic vaccine manufacturing capabilities, making it one of the federal government's most important partners in manufacturing vaccines in the U.S.

Under that contract, Emergent has charged the government $27 million per month in reservation fees to maintain its "readiness" to manufacture vaccine ingredients, documents released by the House committee said. The government has paid $271 million of the contract so far, but partially halted payments since learning of the contamination.

At the hearing Rep. Waters also addressed the involvement of Dr. Robert Kadlec, a former senior adviser to then-President Trump, in awarding Emergent the coronavirus vaccine contract. Before joining the Trump administration, Kadlec accepted more than $360,000 in consulting fees from Emergent, according to documents released by the committee.

The committee memo said that Kadlec personally vouched for Emergent and "requested in August 2020 that Emergent's contract receive a 'priority rating.'" But on Wednesday, Kramer insisted he "was not aware that Dr. Kadlec was directly involved in any award of this contract to Emergent."

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