The Federal Government’s $600M Contract With Troubled Vaccine Manufacturing Plant Emergent is No More

Following a year in which vaccine manufacturing plant Emergent BioSolutions spent many months in the headlines for botching 75 million Johnson & Johnson (J&J) COVID-19 vaccines, the federal government and the troubled company have parted ways.

Emergent — which had to throw out the vaccines after they were cross-contaminated with AstraZeneca’s coronavirus vaccine produced at the company’s storied Bayview, Md., facility — divulged during an investors’ call late last week that the $600 million-plus contract had been terminated as of Nov. 1.

During their call with investors, Emergent executives said the termination of the contract was the result of negotiations with the government after it stopped making payments to Emergent once troubles at the Bayview plant began. Emergent halted production of the vaccines for months after the FDA raised damning quality concerns.

In a statement on its website about the canceled contract, Emergent said, “These are mutually agreed upon terminations for convenience and neither party is alleging breach of default by the other.”

The White House nor the Biomedical Advanced Research and Development Authority (BARDA), through which the contract was administered, did not respond to requests for information on the matter. 

Emergent landed the $600 million contract as part of Operation Warp Speed in May 2020. Emergent now walks away from about $180 million from that contract, according to information from the company.

Emergent pointed out that its contract with J&J remains in place.

The contract’s termination does, however, end a 2012 initiative between Emergent and the Department of Health and Human Services (HHS) to ramp up Emergent’s Baltimore facility in order to prepare for possible future pandemics. At the time, HHS signed a $163 million contract with Emergent.

In 2020, the government had handpicked Emergent to be the only domestic maker of the Johnson & Johnson and AstraZeneca vaccines.

Troubles began in September 2020, when the FDA conducted its first pre-Emergency Use Authorization (EUA) site visit at the Bayview plant and observed crowded manufacturing areas with equipment and supplies, inadequate quality assurance support and several issues related to laboratory controls, according to the memo.

Manufacturing of J&J’s vaccine began at the facility in November. A month later, J&J’s vaccine and AstraZeneca’s vaccine began sharing a common weigh-and-dispense area. With two vaccines being manufactured at the plant, the amount of waste there increased. To handle that, Emergent implemented daily removal of waste by operators who were also working in controlled spaces, the agency found. And medical waste was disposed of in totes along a specific pathway, including through the common weigh-and-dispense area, the agency investigators found.

The FDA returned to the plant for a second pre-EUA site visit in February and discovered many personnel changes and new hires in quality and manufacturing.

On March 26, J&J subsidiary Janssen notified the agency that it had detected the AstraZeneca COVID-19 vaccine virus in a specific batch, the Janssen COVID-19 Vaccine DS batch 21003600 (GMP8). This batch was produced during a period when Emergent implemented measures to handle increased waste production, the FDA said. The agency said the likely cause was that the bioreactor media was contaminated in the common weigh-and-dispense area through contact with the waste path for materials from the AstraZeneca manufacturing area.

Said Emergent in its statement about the cancellation of the huge contract, “We …acknowledged the challenges we faced scaling up production of two novel, viral-vector COVID-19 vaccines in the same facility and addressed them with our fellow innovators as well as the FDA and other health regulators.”

On Thursday’s call last week, Emergent executives said the canceled contract wouldn’t affect other government contracts it holds, adding that the government has committed to buying $637 million worth of Emergent’s anthrax and smallpox products. — Suz Redfearn and Jason Scott