The Trump administration announced a $354 million drug contract with a generic medicine manufacturing company providing “immediate U.S.-based capacity” to produce pharmaceutical ingredients and expand advanced manufacturing capacity, reducing reliance on overseas supply chains.
Phlow Corporation will lead the effort, the U.S. Department of Health and Human Services said in a statement. The Virginia-based company is also planning a new manufacturing facility in-state.
“This is a national security issue,” Hastings Center health expert and Phlow board member Rosemary Gibson said in an interview with the Washington Examiner. “Medicines are our defensive weapons in biowarfare. We can’t rely on foreign sources.”
She added: “To not act is to make the U.S. defenseless.”
Active pharmaceutical ingredients and precursor chemicals for crucial drugs are typically manufactured overseas, often in India or China, leaving the U.S. supply chain exposed during events that lead to drug shortages.
Gibson, who is the author of a 2018 book on critical medicine supply chains, China RX, has called for the United States to start making drugs considered essential under normal circumstances, drugs “that people are scrambling for” during the pandemic.
“We have mothballed plants, empty plants, unused capacity right now in this country. There’s many components to make the medicine, so we can’t make everything here, but we have to start making what we can: The pills, the vials, the active ingredients,” Gibson said. Doing so will create demand for more of the components to be manufactured here, she said.
She added: “I’m going to be blunt. The U.S. Chamber of Commerce saying it will take five, eight years to build plants — we have unused plants right here, right now because of offshoring. It doesn’t take five to eight years.”
China’s importance in global pharmaceutical supply chains is complicated by restricted access, driving companies to invest heavily in the hope of gaining entry and a system of subsidies and regulations designed to spur industrial sector growth.
A letter to Defense Secretary Mark Esper last year from bipartisan senators questioned the country’s “growing reliance” on China for drug and vaccine manufacturing and notes how an interruption in supply of some ingredients could impact military readiness through manufacturing delays.
The letter from Sens. Tom Cotton of Arkansas, Mitt Romney of Utah, Elizabeth Warren of Massachusetts, and Tim Kaine of Virginia also questioned the security of APIs and drugs entering the country, claiming that the Food and Drug Administration does not consistently test or review the quality of drugs and ingredients, despite contamination reports.
The Pentagon spends approximately $7 billion every year on pharmaceuticals and is wholly dependent on the commercial market, the acting deputy assistant director of the Defense Health Agency said before congress last year. “The national security risks of increased Chinese dominance of the global API market cannot be overstated,” he said.
Chinese direct foreign investment in the U.S. biotechnology sector has also remained steady even as overall investment declines.
Phlow said it had already delivered more 1.6 million doses of five generic drugs used to treat coronavirus patients to the U.S. Strategic National Stockpile, including medicines to sedate patients requiring ventilator support, painkillers, and some antibiotics.
The company plans to build a national stockpile of key ingredients for manufacturing medicines viewed as “essential.”
Funding for the four-year program comes from the Biomedical Advanced Research and Development Authority at the Department of Health and Human Services and includes a potential further $458 million for long-term sustainability.
“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,” White House Office of Trade and Manufacturing Policy Peter Navarro said, announcing the plan. “We are now moving swiftly in Trump time to forge an American solution.”
