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| DATE | 2020-05-19 |
| FROM | Ruben Safir
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| SUBJECT | Subject: [Hangout - NYLXS] Getting untangled from the Chinese supply line
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https://www.wsj.com/articles/generic-drugmaker-gets-contract-to-make-covid-19-medicines-in-u-s-11589920608?mod=article_inline&mod=article_inline
Generic Drugmaker Gets Contract to Make Covid-19 Medicines in U.S.
The federal-government award aims to lessen U.S. dependence on drugs and
ingredients made overseas, says the company Phlow
A researcher in the Medicines for All Institute, at Virginia
Commonwealth University, works to scale up a chemical-reaction process.
Photo: VCU College of Engineering
By
and
Updated May 19, 2020 9:01 pm ET
A new generic drugmaker said it was awarded $354 million in federal
funding to make prescription drugs and their raw ingredients in the
U.S., including some medicines used to treat patients infected with
Covid-19.
Privately held Phlow Corp., a Richmond, Va.-based company incorporated
earlier this year, said the funding will support manufacture that began
recently of more than a dozen generic prescription drugs in short supply
that are used to treat Covid-19 patients.
The company said Tuesday that it will also use the funding to make the
building blocks of drugs, known as active pharmaceutical ingredients, as
well as other chemicals.
The Biomedical Advanced Research and Development Authority, a part of
the U.S. Department of Health and Human Services, will provide the
funding over four years. Under the terms, the contract could reach as
high as $812 million over 10 years, according to Phlow.
Phlow said it would begin making medicines and ingredients at plants in
Virginia operated by partners, and by working with Civica Rx, a
nonprofit venture started by hospitals to distribute drugs through
contracts with pharmaceutical manufacturers. Phlow said it plans to open
its own facility in Virginia next year.
The company declined to identify the drugs and ingredients it planned to
make, saying doing so could harm national security. Chief Executive Eric
Edwards said many of the medicines were in short supply before the
pandemic and have been imported from other countries.
“This is an effort to re-secure supply domestically, end to end,” Dr.
Edwards said in an interview, in order to ensure that drugs that
public-health officials deem essential remain available even during
global disruptions like trade disputes or natural disasters.
“Collaborating with Phlow and its partners is an important step in
expanding our manufacturing of strategic APIs and critical medicines at
risk of shortage,” BARDA Acting Director Dr. Gary Disbrow said.
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Much drug manufacturing had moved outside of the U.S. in recent decades
partly because of more favorable tax rates, cheaper labor and friendlier
environmental regulations, industry officials say. Sourcing ingredients
in India can lower costs for U.S. and European companies by as much 40%,
according to the U.S. Food and Drug Administration.
Today China is a leading supplier of drug ingredients, including the
chemicals and raw materials for popular blood-pressure medicines and
several older antibiotics that are no longer manufactured in the U.S.,
industry officials say.
Senior Trump administration officials have for weeks been exploring ways
to promote the manufacturing of key supplies needed to combat the
pandemic in the U.S. in order to limit reliance on other countries, such
as China.
White House trade adviser Peter Navarro has championed that initiative,
while some of the president’s economic advisers and business groups have
expressed concerns about limiting or discouraging imports of key medical
supplies, saying that could lead to further shortages.
“For far too long, we’ve relied on foreign manufacturing and supply
chains for our most important medicines and active pharmaceutical
ingredients while placing America’s health, safety and national security
at grave risk,” Mr. Navarro said in a statement Tuesday.
Phlow had been focused on making medicines for children, and then
pivoted to generic drugs in short supply as Covid-19 began spreading,
according to Dr. Edwards, who had previously co-founded privately held
opioid-antidote maker Kaleo Inc.
Phlow began talking with federal officials in February about making
generic drugs in the U.S., Dr. Edwards said. The company stayed in close
contact with Mr. Navarro’s office, BARDA officials and others in the
administration, according to a person familiar with the matter.
In late March, the company hired two lobbying firms with experience
representing pharmaceutical and biomedical firms, according to lobbying
records, paying them $30,000 in the first quarter.
The company’s pitch to the administration, the person said, focused on
an America-centric message that appealed to officials like Mr. Navarro,
who has pushed for the U.S. to become less reliant on countries
including China.
Phlow hadn’t manufactured or shipped any prescription drugs, Dr. Edwards
said, before receiving a $6 million contract in April to ship to the
U.S. Strategic National Stockpile more than 1.6 million doses of five
generic drugs used to treat Covid-19 patients.
The shipments included antibiotics, painkillers and medicines used to
sedate patients hooked to ventilators, Dr. Edwards said.
To make active pharmaceutical ingredients, Phlow said it is partnering
with California-based AMPAC Fine Chemicals, a subsidiary of South
Korea’s SK Holdings Co. Ltd., and the Medicines for All Institute, based
at the Virginia Commonwealth University College of Engineering.
Write to Jared S. Hopkins at jared.hopkins-at-wsj.com and Rebecca Ballhaus
at Rebecca.Ballhaus-at-wsj.com
Copyright ©2020 Dow Jones & Company, Inc. All Rights Reserved.
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