U.S. signs huge API contract to reduce overseas dependence

Recently, the U.S. government has signed a $ 354 million contract with startup pharmaceutical company Phlow Corporation to produce and supply scarce generic and bulk drugs, including drugs needed for COVID-19 treatment, to create the country ’s first key drug ingredient (API ) Strategic reserves to reduce dependence on overseas supply (mainly China and India).

This four-year contract is signed with the Biomedical Advanced Research and Development Authority (BARDA) and can be extended to $ 812 million within ten years. This is one of the largest contracts in BARDA history. Under the terms of the agreement, Phlow will lead a team of private sector entities including API and intermediate manufacturers Ampac Fine Chemicals, Civica Rx and The Medicines for All Institute.

Phlow said it has begun producing chemical precursor ingredients, APIs and final dosage forms for more than a dozen drugs to treat inpatients with COVID-19-related diseases.

The company said in a statement: "Many of these drugs are in short supply and were previously imported from foreign countries."

Phlow said it also delivered more than 1.6 million doses of five generic drugs for the treatment of COVID-19 to the US Strategic National Reserve Center, including tranquilizers, painkillers and antibiotics for patients who need ventilator support.

 The company said it is also building the first strategic API reserve (SAPIR) in the United States, which is a long-term storage depot that ensures the safety of critical raw materials.

 The decision to award a contract to a new company instead of an established manufacturer has attracted attention.

On its website, Virginia-based Phlow uses itself as a solution to the "fragmented" US drug supply chain that "dangerously depends on foreign suppliers." According to the company, the traditional batch production method is described as a multi-step, lengthy process, which involves the use of large, labor-intensive equipment, resulting in API production mainly concentrated in China and India, where labor costs are low.

The company stated that all of its medicines will be produced in the United States through continuous production, which is described as a modern process that "can maximize output, increase productivity and reduce labor demand."

Phlow's business model is consistent with the Trump administration's desire to readjust US API production. Especially in the current coronavirus pandemic, the safety of drug supply has received greater attention.

Peter Navarro, director of the White House Office, said: "For a long time, we have relied on foreign production and supply chains to provide the most important drugs and active pharmaceutical ingredients, and at the same time put American health, safety and national security at serious risk "The Director of the Trade and Manufacturing Policy Bureau commented on the transaction.

In April, Phlow signed a US $ 6 million contract with the US Department of Health and Human Services to ensure the supply of drugs and APIs that are at risk of shortages due to the COVID-19 pandemic.

The non-profit pharmaceutical company Civica Rx will produce the final dosage form product at the same location where Phlow's precursors and API are produced and distribute it through a network of more than 1,200 hospitals.