Trump makes moves to onshore manufacturing of critical drugs

May 19, 2020

The Trump administration has struck a manufacturing deal worth up to $812 million with Virginia-based Phlow Corp. for COVID-19-related drugs.

Under the four-year contract, Phlow will manufacturing APIs and finished dosage forms for over 12 different medications being used to treat patients with the novel coronavirus. The contract is worth $354 million now and could to include another $458 million in future options.

The deal was announced as the Trump administration begins taking tangible steps to onshore more pharma manufacturing. Several of the medications Phlow is planning to produce are in short supply in the U.S. and being imported from other countries.

Meanwhile, the administration is reportedly also preparing an executive order that would require that certain vital drugs and medical devices are produced in ample quantities in the U.S. 

According to Bloomberg, a draft of the order has been circulating in the White House that says the goal is to reduce the country’s dependence on foreign suppliers of essential medicines and medical countermeasures. The draft stipulates that federal contracts be limited to U.S. manufacturers, and would impact drugs and devices considered “essential” for public health emergencies and biohazard attacks. 

Under the order, the Department of Health and Human Services would in charge of monitoring supply chain vulnerabilities and the Environmental Protection Agency would tasked with streamlining the U.S.-based production of needed APIs for essential drugs. 

Overseas outsourcing of APIs have been a political flashpoint since a widespread blood-pressure medication recall rocked the industry last year. Although many lawmakers have raised concerns about APIs produced in China in particular, there is still little financial incentive to produce the ingredients in the U.S.