Skeptics question White House manufacturing partner for COVID-19 drugs

May 20, 2020

The Trump administration announced a major deal with Phlow Corp. to help onshore more production of critical drugs and APIs related to the coronavirus. 

If the name Phlow Corp. doesn’t ring a bell, it’s because the company was just launched earlier this year. But the CEO of Phlow — Eric Edwards — also co-founded a company that has been in the news many times, just for the wrong reasons.

Kaleo, a pharma company that Edwards led alongside his brother, drew public scorn after it was reported that between 2014 and 2017, the company ratcheted up the price of its opioid overdose drug, Evzio, by more than 600 percent — all while overdose deaths skyrocketed around the country. A U.S. Senate subcommittee report concluded that the price increase ultimately cost taxpayers more than $142 million.

Kaleo was also investigated in 2017 for pricing its generic EpiPen device at $4,500. Although insured consumers were not ultimately charged that amount, lawmakers expressed concerns that the company had devised a scheme that would place the burden of paying the price on insurance companies and other players in the health care system.

At Phlow, Edwards says he originally intended to manufacture pediatric drugs. But after the coronavirus hit, the company shifted course and is now gearing up to manufacture drugs and APIs related to the coronavirus, including hospital drugs, treatments and potential vaccines. With that goal in mind, Phlow was registered as a public-benefit corporation, and after talks with government officials about how the company could help strengthen America’s supply chain for critical drugs, Phlow landed the manufacturing contract with BARDA, which could be worth up to $812 million over 10 years.

With the new public attention, Edwards past in pharma has come back into the public spotlight. Critics have expressed concern about the U.S. government striking a deal with Edward’s company, given his track record. But Edwards has dismissed the criticisms, telling Politico that he was not involved in pricing decisions at Kaleo. And many others in the industry and government, including BARDA’s former director, have praised the deal, which is aimed at securing America’s domestic supply of critical drugs.