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Utah auditor reviewing $800K buy of anti-malarial drugs, other COVID-19 purchases

Emails show health director pushed for controversial drugs despite objections from epidemiologist Dr. Angela Dunn

Utah State Auditor John Dougall signs a copy of the oath of office after being sworn in for a new term at the Capitol in Salt Lake City on Monday, Jan. 2, 2017.
Utah State Auditor John Dougall signs a copy of the oath of office after being sworn in for a new term at the Capitol in Salt Lake City on Monday, Jan. 2, 2017.
Spenser Heaps, Deseret News

SALT LAKE CITY — Utah State Auditor John Dougall confirmed Friday his office is reviewing the state’s $800,000 purchase of anti-malarial drugs — a controversial move that raised red flags from pharmacists and medical professionals, and has since been refunded.

“Yes, we’re looking into it,” Dougall told the Deseret News when asked if his office is reviewing the purchase, adding that he is also reviewing “other COVID-19-related emergency purchases.”

Emails obtained by the Deseret News on Friday also show that state budgeting officials moved to approve the purchase under pressure from Dr. Joseph Miner, executive director of the Utah Department of Health, and state leaders including Senate President Stuart Adams, who were supportive of acting quickly to obtain and facilitate use of the drugs.

That move came despite objections from state epidemiologist Dr. Angela Dunn, the emails show, and other medical professionals who expressed concerns about lack of evidence of the drugs’ benefits for COVID-19 treatment.

Since March 24, 2020, the state’s purchasing department has issued over 300 purchase orders under emergency protocols for about $70 million in supplies for the state’s response amid the coronavirus pandemic, according to governor’s office. Some of those orders have been canceled, the office said, as a result of product failure, failure to deliver or state officials determining the purchases were no longer needed.

Under the state’s COVID-19 emergency declarations, the state’s purchasing director can authorize emergency purchases without using standard competitive bidding processes. Under that policy, currently in effect through May 31, goods and services directly related to the state’s COVID-19 response are exempted from competitive solicitation requirements, but “agencies are encouraged to use as much competition as is practicable,” according to the state’s website.

Dougall and Chris Hughes, director of the Division of Purchasing and General Services, have “already talked about sitting down and taking a look at what actions were taken during this emergency status,” Dougall said. “It’s kind of to be expected in this kind of deviation from normal protocols.”

He said they will look at how the tens of millions of dollars have been spent to fight COVID-19, and they will assess whether or not they need to make changes “if we have this condition in the future.”

After the state’s $800,000 purchase of 20,000 medication packs of hydroxychloroquine and chloroquine came to light, questions have swirled around the deal, including who authorized it and why it took weeks for the transaction to become public knowledge.

Lawmakers with medical backgrounds expressed concerns about purchasing an “unproven” drug the Food and Drug Administration has since cautioned against using outside hospitals or clinical trials. And groups including Alliance for a Better Utah have called the purchase a “closed-door sweetheart deal” between state leaders and the Utah pharmacy that sold the drugs, Meds in Motion.

After completing an internal review of the purchase, Gov. Gary Herbert’s office issued a statement saying it “determined that all involved acted proactively, preemptively and prudently during an emergency to safe lives.” And Meds in Motion owner Dan Richards has defended the deal as completely legal, fair and in “good faith.”

“Although there were breakdowns in communication between state agencies, all involved acted in good faith,” the governor’s office said.

Who ordered it?

Governor’s office officials have said the Governor’s Office of Management and Budget approved the purchase in order to respond to “rapid fire” needs amid the pandemic. Emails obtained by the Deseret News through a public records request indicate Kristen Cox, director of the management and budget office, directed approval of the purchase after collaborating with Senate President Stuart Adams on the day of the March 31 purchase.

Emails also show that Miner — who at the end of March stepped away from day-to-day operations to work from home due to health concerns with COVID-19 — was looped in and on board, poised to file an emergency rule and sign a standing order to facilitate the distribution of the medication to participating pharmacies.

“As part of our attempt to shorten this pandemic and to get the economy back, U of U physicians and pharmacists with Silicone Slopes companies are working with us to make the hydroxychloroquine and chloroquine medications available to those with significant COVID-19 symptoms,” Miner wrote in a March 20 email to Cox, which was copied to Herbert, Lt. Gov. Spencer Cox and their staff, as well as other health department officials.

Miner noted in that email: “President Adams said on a conference call today that he discussed this with the Governor who was supportive.”

But Herbert, in a news conference last week, said he was directly unaware of the $800,000 purchase.

In response to a question from Kristen Cox about how many people the medication would benefit, Miner replied March 21: “We have enough tablets in pharmacies even now to treat about 10,000 individuals but the plan is to import next week enough additional medication to treat a few hundred thousand individuals.”

A few days earlier, on March 19, Miner sent an email to Herbert’s chief of staff, Justin Harding, saying Dr. Kurt Hegmann, a physician at the University of Utah, “and a few other physicians from the U along with Pres Adams have been arranging for the medications President Trump talked about this morning” and asked health department officials to issue the standing order.

“I think this is a great idea and am ready to go with this post haste but wanted to give you a heads up,” Miner wrote to Harding, noting that the governor’s legal counsel and the Utah Attorney General’s Office “agreed with our authority. They feel this is a great way to get control of this and save our economy and I agree.”

“Go for it,” Harding said in an email reply.

Miner’s support for the standing order came despite objections from Dunn, the state epidemiologist, who wrote in an email she agreed with concerns from Andrew Pavia, chief of pediatric infectious disease at the University of Utah, who cautioned state leaders against using the drug for COVID-19 amid a lack of evidence.

“I spoke with Andy about this prior to him sending it and 100% agree with him,” Dunn wrote in a March 22 email. “I am thankful for our experts and their willingness to express their opinions. I expressed the same concerns to UDOH leadership but was unable to change the course of action.”

As for the $800,000 purchase order, even Hughes wasn’t clear who directed the order. Hughes asked Duncan Evans, budget manager for the Governor’s Office of Budget and Management, how he should respond to media inquires about the purchase order, and wrote, “I don’t know anything about this contract or purchase.”

“I believe Kristen and President Adams were somehow involved in the first $800,000 purchase,” Evans wrote in an April 22 email reply to Hughes.

Evans wrote there’s “not a lot of detail” about the purchase because emails only refer to phone calls about the transaction.

In an earlier email on March 31 — the day Hughes signed the $800,000 purchase order — Evans told Hughes in an email that Kristen Cox had said during a morning call that “the purchase is approved.”

A request for more information, including whether Kristen Cox was directed by anyone to approve the order, and an interview with Cox was denied Friday by the governor’s office.

“As the governor stated earlier this week, we’ve done our internal investigation and found no wrongdoing — just miscommunications that are understandable in our crisis posture and which have been fixed,” spokeswoman Brooke Scheffler said Friday. “Kristen Cox is not available for comment.”

Adams, who was a proponent of purchasing the drugs, said Friday that he, too, didn’t know who ultimately ordered the purchase.

“I was supportive of trying to get a solution to this pandemic,” Adams said. “Everybody was in the meeting, I think the health department was in the Zoom call with us, but I don’t know. I actually don’t know who would have determined the prices of the drug.”

“Fog of war’

Late last month, health department officials — including Gen. Jeff Burton, acting executive director of the Utah Department of Health — said they were not aware of the $800,000 purchase of the 20,000 doses until the Deseret News showed them the invoice for the purchase.

Yet emails obtained by the Deseret News show that Burton, weeks before on April 5, replied to an email thread specifically about that 20,000-dose purchase, in which Cox wrote, “We have already purchased 20,000 doses.”

“I’ll get one of my folks ready to take the lead and execute on the acquisition of hydroxychloroquine,” Burton wrote. “I’ll get a recommendation on how many additional doses we believe we’ll need.”

Burton, when asked Friday about that email and why weeks later he told the Deseret News he had “no idea” about the 20,000-dose purchase, said he did not recall the purchase amid the chaos of responding to the pandemic.

He also noted, at the time of that email, he had just barely started as acting health department director, after Miner stepped away from day-to-day operations.

“I’m catching 90 mph fastballs without a glove,” Burton said, saying he couldn’t remember that email or its date. “In fact, I still don’t know who bought it. ... That just didn’t register with me. It wasn’t a purchase that I made or we made.”

At the time, Burton said his focus was on negotiations of a larger contract with Meds in Motion for up to 200,000 additional medication packs — negotiations that have since ceased.

Burton chalked up the confusion around the purchase to “fog of war” amid the chaos of the pandemic. He said ever since he came on as acting health department director, he’s been “getting hammered” with a “machine gun of information.”

While considering purchasing the drug, Burton said state leaders were under intense pressure, caught between some medical professionals advocating the drug passionately, while others just as vehemently opposed it.

“It’s easy to Monday morning quarterback something from your easy chair,” he said. “You’ve got to judge it from the (perspective) of five weeks ago, when the supply chains were broken and we were scrambling. It was so bad, we were going day to day wondering, ‘Do we have enough masks, face shields, gowns?’ It was a day-to-day struggle.”

Above all, Burton said he or anyone at the state would “never try to mislead,” and said everyone had good intentions behind the purchase.

“I don’t think anybody wants this stuff to be in the dark,” he said. “The only thing worse than a crime is a cover-up, so I assure you there was no intention on anyone’s part to mislead or hide stuff. We’re not stupid. We know everything’s going to be out in the open. So you need to judge the intentions and the hearts of people wanting to do the right thing.”

On Dougall’s audit of the purchase and other COVID-19 related purchases, Burton said that’s “fantastic.”

“Bring it on,” he said, welcoming the audit.

Burton acknowledged there’s a balance that needs to be struck between responding fast in order to be prepared amid the pandemic and protecting taxpayer dollars.

“We don’t want to be late to the need, but then we’ll get criticized for being early to the need,” Burton said. “We have to be able to answer those questions, so I think it’s fair game.”

Contributing: Amy Donaldson