HHS Contracts With Pharma Companies, Further Insulating US From Global COVID-19 Response

HHS signed a $354-million contract with a team of private industries to ramp up US pharmaceutical manufacturing and production in wake of the coronavirus disease 2019 (COVID-19) pandemic. Historically, active pharmaceutical ingredients and chemical compounds have been produced abroad, largely in China, and imported by the United States. The move comes after President Donald Trump publically criticized the World Health Organization's response to the pandemic and accused China of witholding critical information regarding coronavirus.

The Biomedical Advanced Research and Development Authority (BARDA) signed a $354-million contract with a team of private industries led by Phlow Corporation to ramp up US pharmaceutical manufacturing in response to the coronavirus disease 2019 (COVID-19) pandemic, according to HHS.

The 4-year contract involves creation of a new drug manufacturing facility in Virginia along with increased capacity to produce active pharmaceutical ingredients (APIs) and chemical compounds for those ingredients. The contract can be extended to a total of $812 million over 10 years, and it is one of the largest-ever grants awarded by BARDA, Forbes reports.

“This is an historic turning point in America’s efforts to onshore its pharmaceutical production and supply chains. [The project] will not only help bring our essential medicines home but actually do so in a way that is cost competitive with the sweatshops and pollution havens of the world,” Peter Navarro, President Donald Trump’s trade advisor, told The New York Times.

Advanced manufacturing processes, including continuous manufacturing, in combination with the new facility will result in lower production costs, reduced waste, and improved ingredient yields, according to HHS.

Continuous manufacturing is widely used in various industries but has yet to be taken up by pharmaceutical companies. The process involves nonstop production within one facility, and it can save time and is able to rapidly respond to drug shortages. However, it can also increase initial costs. The majority of pharmaceutical companies produce medications in batches, allowing for pauses to address quality control.

Phlow Corp.was founded in January 2020 and signed a $6-million contract with HHS in April to secure medications and ingredients at risk due to the pandemic, according to Forbes.

Ampac Fine Chemicals, a custom API manufacturer; Civica RX, a non-profit generic drug company; and the Medicines for All Institute at Virginia Commonwealth University’s College of Engineering, which receives partial funding from the Bill and Melinda Gates Foundation, are among the companies included in the team.

“America has the capabilities, resources, and expertise to secure our medical supply chains; now the Trump administration is providing the leadership to make it happen,” said HHS Secretary Alex Azar. “Working with the private sector, HHS is taking a significant step to rebuild our domestic ability to protect ourselves from health threats by utilizing American-made ingredients and creating new American jobs in the process.”

Historically, APIs have been manufactured outside of the United States. A 2019 report estimated 72% of US API suppliers exist overseas, with 13% in China alone. The FDA estimates “nearly 40% of finished drugs and approximately 80% of active pharmaceutical ingredients are manufactured in registered establishments in more than 150 countries.”

The federal government and Phlow are working to develop a prioritized list of APIs and finished medicines to begin producing in the United States. The list will include “medicines that are used for sedation to help patients requiring ventilator support, pain management, and certain essential antibiotics,” said Eric Edwards, MD, PhD, CEO of Phlow Corp.

No stranger to the pharmaceutical industry, Edwards was a co-founder of pharmaceutical company Kaléo, which launched Auvi-Q (epinephrine injection - USP), a competitor to EpiPen (epinephrine injection - USP). However, Auvi-Q was recalled in 2015 due to dosing issues before being relaunched in 2017. In 2016, Kaléo came under fire for a 600% price hike of its naloxone auto-injector, Evzio, an opioid antidote product. Kaléo began selling the device in July 2014 at $575 per unit; in November 2018, it was priced at $4100.

“Dr. Edwards departed Kaléo on good terms over 1 year ago and had no oversight of drug pricing during the end of his tenure,” a Phlow spokesman told The New York Times.

The HHS contract with Phlow comes after President Trump expressed criticism at the World Health Organization’s (WHO’s) response to the pandemic, further isolating the United States from international pandemic response efforts and bolstering independent American action.

The president suspended US contributions to the organization last month after accusing the WHO of promoting Chinese “disinformation” about the outbreak. The WHO has denied the accusation, saying China has been transparent and cooperative.

In a letter posted on his Twitter feed, the president threatened to permanently halt funding to the organization, accusing China of blocking evidence of the virus, refusing to share data, and denying outside access to its scientists. According to Trump, the only way the United States will consider resuming cooperation with the WHO is if the organization demonstrates its independence from China.

“If the WHO does not commit to major substantive improvements within the next 30 days, I will make my temporary freeze of United States funding to the WHO permanent and reconsider our membership,” the president wrote.

China’s foreign ministry spokesman Zhao Lijian responded, saying the letter was slanderous and that the United States’ decision to stop contributing to the WHO was a violation of its international obligations, Reuters reports.

President Trump also accused the WHO of consistently ignoring “credible reports of the virus spreading in Wuhan in early December 2019 or even earlier, including reports from The Lancet medical journal.” He continued, “The World Health Organization failed to independently investigate credible reports that conflicted directly with the Chinese government’s official accounts, even those that came from sources within Wuhan.”

In a response to the President’s letter, The Lancet issued a statement refuting his claims, noting no report was published in December 2019 and the earliest reports on the outbreak appeared on January 24, 2020. The publication also stated the Chinese scientist and physician contributors to reports “worked with us to quickly make information about this new epidemic outbreak and the disease it caused fully and freely available to an international audience.”

The Lancet further criticized the Trump administration’s admonishing of the WHO, writing the President’s actions are “serious and damaging to efforts to strengthen international cooperation” to control COVID-19.