Pfizer recently asked a U.S. court to dismiss a lawsuit filed by a whistleblower alleging the pharmaceutical giant violated federal laws that control the procurement of new drugs and clinical trial regulations. In its motion, filed on Apr. 22, Pfizer claims the rules do not apply to its COVID-19 vaccine contract with the U.S. Department of Defense (DoD) because, due to “pandemic-related exigencies,” the agreement was executed under the agency’s Other Transaction Authority (OTA), which enabled the deal to bypass rules and regulations that typically exist when government agencies acquire supplies and services with appropriated funds.

Pfizer argues in its motion that because of pandemic-related demands, its agreement with the DoD was not a standard federal procurement contract but rather a “prototype” agreement and therefore was exempt from federal procurement laws and regulations. Thus, Pfizer maintains the whistleblower’s claim that Federal Acquisition Regulation (FAR) applied to its agreement with the DoD “is simply wrong.”

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In its 37-page motion, Pfizer asserts that the “key terms” of the OTA agreement, which form “the basis of [whistleblower’s] complaint,” exist in two instruments—the Base Agreement executed on Jul. 20, 2020; and a Statement of Work (SOW) executed on Jul. 21, 2020. Further, the motion states the SOW spells out the DoD would pay $1.95 billion ($19.50 per dose) for Pfizer’s experimental vaccine once it secures either an EUA for the product or FDA approval. Still, Pfizer—noting the government didn’t join Jackson’s lawsuit—argues the whistleblower is mistaken in the “allegation that the SOW somehow tied payment to Pfizer’s compliance with every particular of the clinical protocol or related FDA regulations,” adding:

The SOW describes a “large scale vaccine manufacturing demonstration” that imposes no requirements relating to Good Clinical Practices (GCP) or related FDA regulation. It states explicitly that Pfizer’s “clinical trials” are “out of scope,” “not related” to the agreement, and that the relevant studies were undertaken at Pfizer’s expense “without the use of Government funding.”

The whistleblower, Brook Jackson, filed her federal complaint on Jan. 8, 2021, under the False Claims Act, after first warning the U.S. Food and Drug Administration (FDA) of significant concerns she witnessed while working for Pfizer clinical trial conductor Ventavia Research Group. Specifically, Jackson, a regional director for the company, stated that Ventavia falsified data, unblinded patients, employed inadequately trained vaccinators, and was slow to follow up on adverse events reported in Pfizer’s pivotal phase III trial. She noted staff in charge of quality control checks were overwhelmed by the magnitude of problems they found.

According to Jackson, she repeatedly notified Ventavia of the severe concerns and finally emailed the FDA. As noted in an article in the BMJ, Ventavia fired Jackson later that same day. Having never been fired before in her career, Jackson was a trained clinical trial auditor who held a director of operations position. She came to Ventavia with over fifteen years of experience in clinical research coordination and management.

In an interview about Pfizer’s declaration that the company didn’t have to follow federal procurement laws, Warner Mendenhall, an attorney on Jackson’s case, said he and his team are exploring their legal options to counter Pfizer’s motion. As reported by the Epoch Times, Mendenhall remarked, “We may lose on this issue because their contract imposes none of the normal checks and balances on quality control and consumer protection that we fought for decades in this country.

Kathryn Ardizzone, Counsel with Knowledge Ecology Group, commented the DoD certified “an absurd fiction” by using an OTA to grant the contract. Federal law defines nontraditional defense contracts as “An entity that is not currently performing and has not performed any contract or subcontract for DoD that is subject to full coverage under the cost accounting standards prescribed,” and “the regulations implementing such section, for at least the 1-year period preceding the solicitation of sources by DoD for the procurement.” 

Yet, Pfizer has numerous contracts with the military agency. Complicating the matter more, the DoD and other government agencies have increased their use of OTAs over the past seven years. According to the Government Accountability Office (GAO), thirty-four OTAs were implemented in fiscal year 2016. Two years later, in fiscal year 2018, that number was 173. Speaking of the increased use of OTAs by government agencies and the fact it shields those holding contracts from essential regulations and laws, Ardizzone emphasized:

“The increasing use of OTAs, which includes in contexts where it’s inappropriate to do so, is undermining the rule of law and jeopardizing the public’s interests.” She commented that the Pfizer contract is an example of an inappropriate context because the contract “was not about producing a prototype.”

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