Pharm Exec: The government has earmarked $5.6 billion in BioShield funding. Does the money match the need? Cameron: I think as they get into the process they will probably find that they won't have enough money. There are always things that people haven't thought of and things that come up. These are R&D programs that, by definition, are somewhat uncertain.
For example, the actual procurement price of our vaccine is still to be fixed. At this stage, there are just estimates, and the number of vaccines has not been nailed down either. And with anthrax, for example, if it uses up more funds than intended, something else will fall off the end or they will need to get more funding to make up the shortfall.Will BioShield's expedited FDA approval process benefit your products? We have witnessed some of that already with our own program, the smallpox vaccine, in which we got a contract at the end of 2001 to develop a new vaccine and begin clinical testing. It is possible that by early next year, which is just more than three years after we started, we might be in a position to file a BLA [biologics license application]. It's partly a function of the nature of the product, but it's also a function of the way we have been able to rapidly move through the clinical trial process. We have had a lot of interaction with FDA, which has meant quick turnaround of documentation. If inspections of facilities are required, they tend to be done quickly. So yes, I think we are a testament to that process actually working quite well.
If, during a crisis, FDA allows the use of certain products that have not been thoroughly tested, who is liable if people suffer negative side effects? Addressing this issue was a precondition for our involvement in these programs. It certainly was for the smallpox vaccine contract that we won. We sought and obtained indemnification through the government, through HHS [Health and Human Services] and the Department of Homeland Security, ultimately to provide indemnification for us. So certainly for us that is a precondition, particularly if you are talking about the possibility of using unlicensed material.
Would you advise any company entering into an agreement with the government for a bioterrorism product to do the same? I would. People can debate what the actual risk is. But nevertheless, it is a risk. You have millions of doses being supplied to the government that can be used very quickly in an emergency situation. In most cases, it could be an unlicensed vaccine. Therefore, for a company not to be considering an indemnity-type situation, I think, would be potentially quite risky. As a public company, they shouldn't be subject to that unnecessary risk from litigation.
Does the BioShield legislation address the price issue adequately or should pharma companies going into the bio-terror business be concerned? I think there are two issues: There is the up-front procurement—how many doses does the government want to order initially, which generally can have a fixed, agreed, up-front price. That's easy enough. It's the future orders that some companies are rightly having difficulty with in terms of trying to agree on a price. And likewise, the government is also having difficulty being able to commit to pay a particular price that many years hence. I believe the legislation needs to give more freedom or ability for the government to commit to longer-term procurement of a product at pre-agreed prices or with some kind of flexibility.