BARDA rejects idea to use bonds for bioterrorism countermeasure funding
The Annapolis, Maryland-based PharmAthene and other small biotechnology companies asked the federal government in 2011 to switch from contracts to bond financing. The contracts are seen in the industry as costly and sometimes unreliable as a revenue source for drug development, the Washington Post reports.
"We determined that using any bonds was not in the best interest of the taxpayer," Robin Robinson, the director of BARDA, said, according to the Washington Post. "The analysis indicated that there are high risks involved in a volatile bond market."
Eric Richman, PharmAthene's president and chief executive, said last year that using bonds would enable scientific research to continue unimpeded without dealing with delays and costs connected with competing for government contracts.
"We continue to be supportive of innovative ideas like biomedical bonds to advance medical countermeasures and other critical life science technologies," Richman said, according to the Washington Post.
Without contracts or bonds, major pharmaceutical companies have little incentive to develop biological countermeasures.
The volatility of the bond market is not the only deterrent to switching to a bond system.
"You think of bond projects for things like building a new bus stop,'' Alan Shaw, the chief executive of Vedantra Pharmaceuticals, said, according to the Washington Post. "They're not generally applicable to high-risk endeavors like vaccine development. The failure rate for biotechnology is huge."