$20 Million On An Unproven Malaria Drug, $650 Million On A Coronavirus Cure: How Trump’s Government Has Spent Over $3 Billion Fighting COVID-19

It’s been just over a month since President Trump announced a national emergency in response to the spread of COVID-19, the virus now believed to have claimed the lives of more than 25,000 people across America. 

The president pledged to release billions in funding to fight the coronavirus. Now, information from the Federal Procurement Data System shows well over $3.02 billion has been spent to date, almost half of which has come out of the Health and Human Services (HHS) department.

The FPDS team notes the figure is just “a portion” of what’s actually been spent, as many federal agencies won’t have reported all contract data, largely thanks to the limitations and burdens imposed by the coronavirus. But over 2,800 separate orders have been recorded as being spent on COVID-19 aid, with some huge deals being signed by some of the world’s biggest companies.

Much of the spend has been predictable: massive contracts for ventilators, personal protection equipment and hospital building. But there are some outgoings that might prove more controversial, from $25 million on big data cruncher Palantir to a $20 million trial testing the efficacy of antimalarial hydroxychloroquine, a drug promoted by Trump in treating COVID-19 but questioned by one of his lead health advisors, amongst many others.

Forbes dove into the data to see where Trump’s money is going to deal with the biggest health crisis he or any other president has faced.

COVID-19 cures and treatments: $1 billion and counting

One of the biggest contracts handed out to date is a $456 million deal with Johnson & Johnson’s pharmaceutical business Janssen for a coronavirus vaccine that could be in use in early 2021, as previously reported by Forbes. That forms part of an overall deal worth $690 million to provide COVID-19 treatments.

Another $30 million contract was handed to Protein Sciences, a company owned by pharma giant and big COVID-19 contract winner Sanofi, on April 7 for clinical studies for a COVID-19 vaccine candidate. On Tuesday, Sanofi announced a major partnership with rival GSK to develop a vaccine, which could be in use in the second half of 2021.

Controversially, the U.S. is also aggressively pursuing the use of anti-malaria drug hydroxychloroquine as a possible COVID-19 treatment. Whilst Trump has promoted the substance, Dr. Anthony Fauci has warned there’s no proof it can be used to prevent the coronavirus. The biggest contract to test Trump’s theory that it’ll work on COVID-19 is a $20.7 million contract revealed on Tuesday between the HHS department and Florida’s Alchem Laboratories. As per the contract description, the money is paying for a “trial of the safety and efficacy of hydroxychloroquine and the combination of hydroxychloroquine and famotidine for the treatment of moderate to severe COVID-19 disease.” Famotidine, which is perhaps better known by its brand name Pepcid, is designed to decrease stomach acid production. It’s unclear what link it has to the treatment of the coronavirus. (Alchem hadn’t responded to a request for comment at the time of publication.)

Another major winner in the pharma world is Regeneron, which was awarded $92 million with the potential for the contract to go up to $211 million, as it works on various initiatives for treating the virus. That includes a program with Sanofi evaluating Kevzara, a drug typically used by those suffering from rheumatoid arthritis, as a treatment, as well as the development of “a novel multi-antibody cocktail” that could go into clinical studies by summer. 

Ventilators: At least $2 billion coming soon

Spending on ventilators shot up in the last few days thanks in part to massive spending on General Electric (GE) company Datex-Ohmeda. First came an order of $64 million on April 13 then another on April 14 at $336 million, for a total of $400 million in just two days. Both came from the HHS Office of the Assistant Secretary for Preparedness and Response. That makes up the majority of just over $410 million in contracts awarded to GE companies, as recorded by FPDS. 

Another $20 million was spent on April 13 for ventilators delivered by Indiana multibillion-value company Hill-Rom. Elsewhere, on April 1, Florida-based respiratory equipment provider First Nation Group received a $48 million order for Philips-brand ventilators.

Veterans Affairs, the second biggest COVID-19 spender out of all federal agencies after HHS with more than $600 million, used $28 million of its budget on ventilators on March 24, including one $14.2 million order for German-owned medical device manufacturer Draeger and $15.2 million on Swiss company Hamilton Medical.

The FPDS data doesn’t include more than $2 billion that’s been pledged for 130,000 future ventilators, as announced by HHS this month. Philips has been promised a whopping  $646.7 million for 45,500 ventilators, the first batch of which is due to be delivered by the end of May. Other manufacturers are scoring huge deals too, including Hamilton with a $552 million order and General Motors with $489.4 million. (The Philips and Hamilton deals were uploaded to FPDS after publication, as was a $350 million deal with Zoll Medical for ventilators.)

Masks and other PPE: $500 million at least

Vast amounts of money has also gone on masks and other personal protective gear. On March 25, HHS ordered $173 million in N95 masks from 3M Company. Just a few days earlier, it spent $148 million on Honeywell’s version of the product.

The Federal Emergency Management Agency (FEMA) paid special forces equipment provider Panthera Worldwide $55 million for their N95 masks, in another of the bigger deals. And FEMA spent $96 million on Airboss body-worn air-purifying respirators to protect New York hospital staff dealing with COVID-19 outbreaks. Draeger also scored a $31 million respirator order from HHS in late March.

Perhaps the most surprising deal went to Ohio-based Aunt Flow, which typically makes menstruation products like tampons and pads, but was given $15 million from Veterans Affairs to make masks. The same department spent $33 million on PPE equipment from Venergy group,  a small business owned by service disabled veterans.

In an associated deal, FedEx was given $60 million to safely and efficiently transport all that PPE and other supplies. 

Tests: Lower spending

Comparatively, the FPDS data indicates less has been spent on testing than protective gear and ventilators. But tens of millions has still been spent on various providers. They include two HHS purchases over April 4 and 5, with a $12.8 million order for testing services from New Jersey’s Quest Diagnostics and another $12 million for the same from Walgreens. Quest announced on April 13 it had the ability to carry out 45,000 COVID-19 tests per day, having already tested as many as 800,000 so far. Walgreens, meanwhile, has been providing tests at “drive-thru” centers across seven states, using tech from Abbott Laboratories, which secured a separate $4.5 million deal with Veterans Affairs.

FEMA has been ramping up its testing spend in April, with $10 million spent last week across three different South Korean manufacturers: SD Biosensor, Solgent and OSANG Healthcare.

Constructing emergency hospitals: New York sees big spend

A significant chunk of coronavirus spend to date has gone on either constructing or retrofitting facilities for treating patients and quarantining people being repatriated into the U.S. For instance, Aecom Technical Services was handed $116 million by the U.S. Army to set up a field hospital on the site of the State University of New York College at Old Westbury. The Army also handed $136 million to Turner Construction Company to set up a similar facility at Stony Brook University in New York. And tens of millions of dollars have gone on other sites at Van Cortlandt Park, Aqueduct RaceTrack, Westchester Community Center and the Jacob Javits Convention Center. If other cities see similar levels of COVID-19 outbreak as New York, where more than 10,000 have died of the disease, expect similar big-money deals to be signed elsewhere soon.

Forbes previously reported on two organizations - Rapid Deployment and CSI Aviation - who were making tens of millions supplying coronavirus quarantine centers and transporting people between them. Rapid Deployment was an intriguing choice; its owner had previously been investigated for overcharging for contracts in the emergency response after hurricane Katrina, though he was never prosecuted and the company didn’t have to hand money back to the government.

Tech: Palantir the Silicon Valley winner

With the huge logistical challenges associated with keeping federal government employees operational as they’re forced to work from home, and with the need for tools to help track the spread of coronavirus, tech companies have signed some significant deals in the last month. As Forbes previously reported, Peter Thiel-funded Palantir has secured at least $25 million in deals with the U.S. Coast Guard and the HHS as the agencies use the big data cruncher to monitor the disease and resources required to fight it.

Elsewhere, the Small Business Administration handed out one of the biggest tech-related contracts, at $65 million, to little-known government contractor RER Solutions for “data analysis and loan recommendation services for COVID-19.”

Tens of millions have also been spent on PCs, iPads, security software and other tech, all to help government employees do their jobs whilst staying safe.

Once the dust has settled on this unprecedented crisis and the full contracting data is laid out for all to see, attention will turn to how well the president, one who built a reputation on indomitable business acumen, spent the nation’s coffers to save its people.

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