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Siga Technologies (SIGA) just cannot catch a break.

Last month's awarding of the heavily anticipated BARDA contract for Siga's smallpox vaccine, ST-246, was instantly marred by a protest filed by Chimerix, Inc., a competitor that is developing a smallpox vaccine of its own.

That wasn't the first time that Chimerix has looked to stop Siga from receiving the contract award, but Chimerix has a tag-team partner this time that goes by the name of US House of Representatives.

Earlier this week it was announced that two Congressional committees were investigating the awarding of the BARDA contract to Siga, focusing on Ron Perelman, who has close ties to many government officials and whose holding company owns close to 30% of SIGA stock, according to public documents.

The contract could be worth up to $2.8 billion for Siga, making it a highly lucrative endeavor for Perelman, as well.

SIGA shares slipped an initial 8% on the news, and now trade for under eleven dollars.

Rep. Darrell Issa, a Republican from California, is looking to see if the White House had any involvment in landing this contract for Siga - which indicates that this issue is just as much about partisan politics as it is about searching for ethics; after all, we all know that ethics in Washington only matter when it can benefit someone (or a party) politically.

What is not debatable, however, is that Siga has the best option to fill a gap in the national biodefense stockpiles. Therefore, I can't help but believe that Siga is ultimately going to receive this contract. Maybe Perelman's political ties do look a bit suspicious, but at the end of the day, Siga is the only company that can instantly meet the demand for the product, and that enough is reason for the contract award to go through, if common sense is to play a role (which it rarely does in Washington).

So keep an eye on SIGA, as this dip in price may be a bit premature.

What's becoming quite noticable these days, however, is the role that Washington is looking to play in the biotech and pharmaceutical markets. First it was Avanir (AVNR) that came under the gun from Congress for the pricing of recently launched Nuedexta, and then it was revealed that Gilead (GILD) had received a subpoena from the feds regarding the company's manufacturing and quality and distribution practices.

Not too long before, Gilead had announced that it would be raising the prices of some of its popular HIV drugs.

It's unclear whether these three instances are forecasting a trend shift in Washington, but investors in the sector should take note. Since much of President Obama's healthcare plan and reforms revolved around the reduction of costs for treatment and drugs, the entire sector was put on check when reform was placed at the top of this administration's priority list.

Washington may play its games, and these instances are important enough to warrant a strong following, but it's my opinion that this is all just political posturing as the campaign season is heating up.

I think we'll see that the end-game is that Gilead keeps its prices right where the company wants them. So does Avanir - and Siga gets its contract.

The pharmaceutical juggernaut puts too much money into the campaign coffers of Washington to see it any other way.

Source: Siga Can't Catch a Break From Competitors, Congress