[back] Smallpox heist 2002
Labour claims unravel over
By Francis Elliott, Deputy Political Editor
THE scandal surrounding the award of a £32 million smallpox vaccine contract to a Labour Party donor grew last night after the Government's attempt to justify the deal was flatly contradicted by Britain's leading virologist.
Professor John Oxford, a world renowned expert on vaccine science, told The Telegraph that there was "no medical reason" why the vaccine made by the donor's company had been chosen over rival products.
He spoke out amid arguments over the handing of the contract to PowderJect Pharmaceuticals, whose owner gave £50,000 to Labour nine months ago.
Rival companies protested that they had not been given a fair chance to bid in the secretive deal, which will provide vaccines to protect Britons in the event of germ warfare.
Paul Drayson, the chief executive of PowderJect and a former Conservative Party supporter, gave the money to Labour last July, making him the biggest donor to the party since the election. It was his first gift to Labour.
In an attempt to halt the controversy yesterday, John Hutton, the health minister, claimed that the contract had gone to PowderJect because it was the only company which was able to supply a particular strain of the vaccine, the Lister strain.
Mr Hutton, rejecting calls for an independent investigation, said: "The contract was awarded to PowderJect for one reason and one reason alone. They were the only company that were able to supply the vaccine that we required as soon as possible.
"We have taken advice right across government about the suitability of this particular strain and we are absolutely sure this is the right strain for us to use."
Mr Hutton's assertions were promptly countered by rival companies which said that they could have supplied equally effective protection.
The most damaging, and independent, contradiction, however, came from Professor Oxford, of St Bartholomew's and the Royal London School of Medicine. He said: "I would have thought there is no medical reason for this.
"The Lister strain is the classic strain that has always been used in this country but it is only one of a number that were used in the global eradication programmes in the 1970s.
About £20 million of the £32 million contract will go to PowderJect. The rest will go to a Danish company with which it is working. City analysts believe that the contract could net PowderJect £10 million in profit, a 50 per cent margin.
Officials close to ministers yesterday claimed privately that the Lister strain made by PowderJect was selected on the advice of military intelligence, suggesting that it would counter a specific terrorist threat.
However, the US government which is also stocking up on smallpox vaccines to guard against an attack, is using a different strain which is made by another British company, Acambis Plc.
Tim Collins, the shadow cabinet office minister, called for an independent investigation into the way the contract was awarded. He said: "There are some very serious questions about how the process has been conducted."
The Telegraph has learned that Mr Blair ordered emergency stockpiling of vaccine after he was warned by Washington that an attack on Iraq could result in biological weapons being used against Britain.
Dr John Brown, the chief executive of Acambis, angrily questioned why his company was denied a chance to supply the British Government.
He said: "At the moment we are producing for the US government. It would be highly unlikely that anyone is going to be able to get a fully-tested vaccine available before us."
Dr Brown also said that his product was being tested by medicines safety officials in the United States and that it was expected to win approval next year from the food and drugs administration, the world's most rigorous licencing authority.
By contrast, a spokesman for PowderJect conceded that its product would not be licensed by the UK Medicines Control Agency.
Dr Drayson, 41, co-founded PowderJect Pharmaceuticals in 1993. He has become a staunch New Labour supporter.
When the Prime Minister was under fire for refusing to reveal whether his son, Leo, had had the MMR vaccine, Dr Drayson dismissed the criticism as "unfair".
He was also one of six industrialists who signed a letter to the Financial Times before the last election, endorsing the Goverment's record on promoting business.
In addition to the smallpox deal, his firm has a £17 million government contract to supply anti-TB vaccines to schools.
The Department of Health, however, is understood to be looking for alternative suppliers after PowderJect increased the price four-fold.