Trump administration awards $350M contract to ramp up U.S. drug manufacturing

More than 70 percent of the world’s drug ingredients are made in facilities outside the U.S., including factories in China and India that are prone to shortages and quality concerns, according to the Food and Drug Administration.

Phlow, which was founded in January, is working with established industry partners, including ingredient manufacturer AMPAC, nonprofit generic firm Civica Rx, and the Medicines for All Institute at Virginia Commonwealth University’s College of Engineering.

The relationship between Phlow and AMPAC makes sense because AMPAC has a manufacturing facility in the Richmond area, said John DiLoretto, executive director of the Bulk Pharmaceutical Task Force — whose members include AMPAC.

But DiLoretto cautioned that even if drug makers shift more production to the U.S., the raw materials used to make drug ingredients are still located abroad.

It’s not clear how long it will take Phlow to manufacture drugs and ingredients at scale. Nor is it clear why the administration is betting so heavily on a young company with almost no discernible track record.

Phlow’s CEO and co-founder, Eric Edwards, had previously helped create the drug company Kaleo to market Auvi-Q, a competitor to the EpiPen. Sanofi, which originally owned the drug, pulled it from the market in 2015 over safety concerns. Kaleo brought the medicine back to market in 2017.

The firm also ran into controversy over its pricing of Evzio, an auto-injector of the opioid overdose treatment naloxone. The list price of the treatment soared from $575 in 2014 to $4,100 in 2017.

The BARDA contract is the second that Phlow has won from the U.S. government in its short existence, according to federal records.

In April, HHS signed a $6 million deal with the company to produce essential drugs and pharmaceutical ingredients — a contract that records indicate was not opened up for broader competition. That agreement is scheduled to expire at the end of the week. HHS has not responded to a request for comment on whether the latest contract was awarded competitively.

Former BARDA Director Rick Bright, who was ousted from the agency last month and filed a whistleblower complaint against the Trump administration, praised the new deal.

“Congratulations to BARDA and their partners for envisioning and enabling solutions to address critical challenges to saving lives, during the pandemic and every day,” he wrote on LinkedIn. “Domestic production capabilities for essential medicines reduce costs, improve quality and improve access for everyone. This, in turn, will save lives.”