The shortage of lifesaving medical equipment last year was a searing example of the government’s failed coronavirus response. As health workers resorted to wearing trash bags, one Maryland company profited by selling anthrax vaccines to the country’s emergency reserve.

By Chris Hamby and Sheryl Gay Stolberg

WASHINGTON — A year ago, President Donald J. Trump declared a national emergency, promising a wartime footing to combat the coronavirus. But as Covid-19 spread unchecked, sending thousands of dying people to the hospital, desperate pleas for protective masks and other medical supplies went unanswered.

Health workers resorted to wearing trash bags. Fearful hospital officials turned away sick patients. Governors complained about being left in the lurch. Today the shortage of basic supplies, alongside inadequate testing and the slow vaccine rollout, stands as a symbol of the broken federal response to a worldwide calamity that has killed more than a half-million Americans.

Explanations about what went wrong have devolved into partisan finger pointing, with Mr. Trump blaming the Obama administration for leaving the cupboard bare, and Democrats in Congress accusing Mr. Trump of negligence.

An investigation by The New York Times found a hidden explanation: Government purchases for the Strategic National Stockpile, the country’s emergency medical reserve where such equipment is kept, have largely been driven by the demands and financial interests of a handful of biotech firms that have specialized in products that address terrorist threats rather than infectious disease.

Chief among them is Emergent BioSolutions, a Maryland-based company now manufacturing Covid-19 vaccines for AstraZeneca and Johnson & Johnson. Last year, as the pandemic raced across the country, the government paid Emergent $626 million for products that included vaccines to fight an entirely different threat: a terrorist attack using anthrax.

Throughout most of the last decade, the government has spent nearly half of the stockpile’s half-billion-dollar annual budget on the company’s anthrax vaccines, The Times found. That left the government with less money to buy supplies needed in a pandemic, despite repeatedly being advised to do so.

Under normal circumstances, Emergent’s relationship with the federal stockpile would be of little public interest — an obscure contractor in an obscure corner of the federal bureaucracy applying the standard tools of Washington, like well-connected lobbyists and campaign contributions, to create a business heavily dependent on taxpayer dollars.

Security concerns, moreover, keep most information about stockpile purchases under wraps. Details about the contracts and inventory are rarely made public, and even the storage locations are secret.

But with the stockpile now infamous for what it doesn’t have, The Times penetrated this clandestine world by examining more than 40,000 pages of documents, some previously undisclosed, and interviewing more than 60 people with inside knowledge of the stockpile.

Former Emergent employees, government contractors, members of Congress, biodefense experts and current and former officials from agencies that oversee the stockpile described a deeply dysfunctional system that contributed to the shocking shortages last year. Their accounts were confirmed by federal budget and contracting records, agency planning documents, court filings, corporate disclosures and transcripts of congressional hearings and investor presentations.

Purchases are supposed to be based on careful assessments by government officials of how best to save lives, but many have also been influenced by Emergent’s bottom line, the documents and interviews reveal. One year, the government increased its order of Emergent’s main anthrax vaccine by $100 million after the company insisted it needed the additional sales to stay in business, according to two former federal officials. At the time that order was announced, in 2016, the reserve already had enough to vaccinate more than 10 million people. The stockpile has long been the company’s biggest and most reliable customer for its anthrax vaccines, which expire and need to be replaced every few years.

In the two decades since the repository was created, Emergent’s aggressive tactics, broad political connections and penchant for undercutting competitors have given it remarkable sway over the government’s purchasing decisions related to the vaccines, the interviews and documents show.

One of the vaccines has yet to be approved as safe and needed special clearance to be bought by the government, which has maintained a large supply of another Emergent vaccine after a string of anthrax attacks nearly 20 years ago left five people dead. Those were the last anthrax attacks in the United States. While national security officials still consider anthrax a threat, it has not received specific mention since 2012 in the intelligence community’s annual public assessment of dangers facing the country, a report that has repeatedly warned of pandemics.

“The risk of a serious terrorist attack with anthrax is real, but that doesn’t mean you buy unlimited quantities of vaccine,” said Dr. Thomas Frieden, the director of the Centers for Disease Control and Prevention under former President Barack Obama. “It is a zero sum. There’s only so much money, and so if you buy more of one thing, you have to buy less of another.”

Emergent bought the license for the country’s only approved anthrax vaccine in 1998 from the State of Michigan. Over time, the price per dose the government agreed to pay Emergent increased nearly sixfold, accounting for inflation, contributing to record revenues last year that topped $1.5 billion. The biggest source was the sale of anthrax and smallpox vaccines even as the company also began manufacturing coronavirus vaccines.

The company’s chief executive, Robert Kramer, told Wall Street analysts last month that 2020 was “the strongest year in our 22-year history.” Emergent’s stock performed so well that its founder and chairman cashed in shares and options worth over $42 million, more than he had redeemed in the previous five years combined, corporate filings show.

The company declined to make Mr. Kramer or other executives available for an interview before publication, citing the pressing needs of its Covid-19 vaccine efforts. In written responses to questions, an Emergent spokeswoman defended the vaccine’s pricing, saying “the vaccine and the facilities needed large, long-overdue investments” when they were purchased from Michigan.

“You can’t protect people from anthrax for less than the cost of a latte,” said the spokeswoman, Nina DeLorenzo, a senior vice president.

The company, whose board is stocked with former federal officials, has deployed a lobbying budget more typical of some big pharmaceutical companies, The Times found, and has sometimes resorted to tactics considered underhanded even in Washington. Competing efforts to develop a better and cheaper anthrax vaccine, for example, collapsed after Emergent outmaneuvered its rivals, the documents and interviews show.

As Emergent prospered, other companies working on pandemic remedies for the stockpile were squeezed out of government spending decisions, and former federal health officials said preparations for an outbreak like Covid-19 almost always took a back seat to Emergent’s anthrax vaccines.

In one telling example, The Times found, the government approved a plan in 2015 to buy tens of millions of N95 respirators — lifesaving equipment for medical workers that has been in short supply because of Covid-19 — but the masks repeatedly lost out in the competition for funding over the years leading up to the pandemic, according to five former federal health officials involved in the effort. During the same period, Emergent sold the government nearly $1 billion in anthrax vaccines, financial disclosures show.

Ms. DeLorenzo said Emergent has long insisted that there should be more federal spending to ensure “preparedness for the full range of threats.” It would be wrong to choose one threat over the other, she said, and to “partially fund everything at a low level” would leave “the American public dangerously exposed to real and grave threats.”

She characterized the company’s lobbying as “education-focused” and “appropriate and necessary.”

After Dr. Frieden and others in the Obama administration tried but failed to lessen Emergent’s dominance over stockpile purchases, the company’s fortunes rose under Mr. Trump, who appointed a former Emergent consultant with a background in bioterrorism to run the office that now oversees the stockpile.

Yet that official, Dr. Robert Kadlec, also said that spending on the company’s anthrax vaccines limited his ability to prepare for other potential disasters.

“If I could spend less on anthrax replenishment, I could buy more N95s,” Dr. Kadlec said in an interview shortly after leaving office. “I could buy more ventilators. I could buy more of other things that quite frankly I didn’t have the money to buy.”

But even as he fretted over the stockpile’s lack of preparedness for a pandemic, Dr. Kadlec said, he felt compelled to continue preparing for anthrax and other bioterrorism threats. His office awarded roughly $3 billion in long-term contracts to Emergent in the months before the Covid-19 crisis, and last year decided to buy the company’s unlicensed anthrax vaccine — relying on the same emergency authority that has allowed the use of unlicensed coronavirus vaccines and treatments.

And now, as some members of Congress push for larger reserves of ventilators, masks and other equipment needed in a pandemic, a trade group led in part by a top Emergent lobbyist has warned that the purchases could endanger companies focused on threats like anthrax and smallpox by drawing down limited funds.

Ms. DeLorenzo said the commercial market was too small to sustain manufacturing on its own, so companies needed government assurances.

“The capabilities must be maintained, or they are in danger of being lost, leaving the country vulnerable to threats,” she said. “When almost no one else would invest in preparing to protect the American public from grave threats, Emergent did, and the country is better prepared today because of it.”

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