Trump administration awards contract to make COVID-19 drugs in US

Darnell Taylor
May 22, 2020

A Richmond, Virginia, drug company has secured a federal contract worth up to $800 million to manufacture key medicines used to treat COVID-19 patients in what the White House described as a major step in reducing the United States' reliance on foreign supply chains. Hydroxychloroquine is usually used against malaria, lupus, and rheumatoid arthritis.

Phlow has also said it is building the United States' first Strategic Active Pharmaceutical Ingredients Reserve (SAPIR), a long-term, national stockpile to secure key ingredients used to manufacture the most essential medicines on US soil, reducing America's dependency on foreign nations to support its drug supply chain.

Phlow, which was incorporated in January, said the contract will help it contribute to a national stockpile of active pharmaceutical ingredients for essential medicines.

Numerous active ingredients in medicines and the starting materials needed to make them are produced overseas, and the coronavirus pandemic had heightened fears that the overly reliant on drug imports that could be disrupted in an emergency, particularly from China and India.

The federal government is awarding $354 million to Phlow in a contract that includes an additional $458 million as potential options. The institute was created in 2017 with support from a Bill and Melinda Gates Foundation grant to improve the manufacturing of pharmaceuticals worldwide, with a particular focus on nations in Africa that struggle with drug shortages. "It's a very serious situation that we're approaching", she said. "It's innovation that will allow American workers to compete with the pollution havens, sweatshops and tax havens of the world", said Peter Navarro, a White House adviser who has led the effort to return manufacturing to the United States. Many of these medicines are in shortage and have previously been imported from foreign countries.

The Medicines for All Institute is also a nonprofit organization dedicated to advancing drug manufacturing processes. The majority come from China and India.

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Going forward, Phlow will also help build up the Strategic Active Pharmaceutical Ingredients Reserve, a first-time US attempt at a long-term, national stockpile of key ingredients used to manufacture essential medicines on USA soil.

It said it had already started making pharmaceutical ingredients and finished dosage forms for over a dozen essential medicines to treat hospitalized patients with COVID-19-related illnesses.

Researchers at the Microbiology Research Facility work with CCP virus samples as a trial begins to see whether hydroxychloroquine can prevent or reduce the severity of the COVID-19, at the University of Minnesota in Minneapolis, Minnesota, on March 19, 2020.

"This technology has not been widely adopted in the generic pharmaceutical industry but when used, it can increase the quality, safety, and volume of medicines, yielding lower costs for Americans", the team said in a press release.

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