HHS Steered $700 Million From CDC to Fund Warp Speed Program

(Bloomberg) -- Trump administration officials pulled $700 million from the Centers for Disease Control and Prevention, the key health agency involved in protecting the public from infection, to fund the Operation Warp Speed effort to develop drugs and vaccines, according to people familiar with the matter.

The money came from funds Congress appropriated to the CDC in stimulus legislation earlier this year, said the people, who asked not to be named because the matter isn’t public. The CDC received about $7.5 billion in stimulus funds this year to respond to Covid-19, on top of its annual appropriation.

The administration has been under fire for its response to the pandemic amid reports officials tried to manipulate CDC scientific research publications. Michael Caputo, a high-ranking Health and Human Services Department official and former Trump campaign aide, took a leave of absence today after reports that he posted rants on social media accusing CDC scientists of “sedition” and undermining the president.

CDC’s funds are being used for activities such as preparation for vaccine distribution, according to an administration official. For example, the agency last month provided funds to McKesson Corp. to distribute future Covid-19 vaccines and related supplies, the official said in an email. The CARES Act bill sent CDC funds to “prevent, prepare for, and respond to coronavirus,” the official said.

Senate Hearing

At a Senate Appropriations Subcommittee hearing earlier Wednesday, CDC Director Robert Redfield testified that HHS had requested an additional $300 million from his agency to fund a public information campaign about the virus.

“CDC received a direction from HHS and [the Office of Management and Budget] to transfer $300 million to HHS ASPA,” Redfield said, referring to the HHS office of the assistant secretary for public affairs. That office had been run by Caputo.

Redfield told senators that the agency wasn’t involved in the HHS media campaign beyond having the funds transferred from his agency.

“We haven’t played a role,” he said. “I assume that they’re going to come back to the different subject matter experts, but again, we haven’t been involved in that.”

The CDC’s budget before the stimulus funding is $8 billion this year. The agency needs an additional $6 billion to help distribute a potential coronavirus vaccine, Redfield told lawmakers.

Operation Warp Speed involves several federal health agencies, including the CDC, National Institutes of Health, Biomedical Advanced Research and Development Authority, and the Food and Drug Administration, as well as the Department of Defense. The goal is to quickly produce millions doses of a coronavirus vaccine, several of which are in clinical trials now, and to accelerate the development of other therapies and tests.

The program received about $10 billion in Congressional appropriations as of June, according to an HHS website. That page mentions specific allocations from the NIH and BARDA.

“Congress has also appropriated other flexible funding,” the website says.

CDC officials didn’t immediately respond when reached for comment.

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