Responding to COVID-19’s wakeup call as it exposes the risks of relying heavily on foreign biopharma supply chains, the U.S. Department of Health and Human Services (HHS) signed a four-year, $354 million agreement with a team of private industry partners, led by Phlow Corp., to expand U.S. manufacturing of essential medicines at risk of shortage during the pandemic and in future public health emergencies.
The HHS’ Biomedical Advanced Research and Development Authority (BARDA) contract, which can be extended for a total of $812 million over 10 years, could disrupt generic competition for essential medicines in the U.S. by bringing more drug and active pharmaceutical ingredient (API) manufacturing back to America and introducing more efficient manufacturing technologies, while rallying the nonprofit sector of generic drug development.
Richmond, Va.-based Phlow is a public benefit drug manufacturing company. Its industry partners in the BARDA contract include Civica Rx, established two years ago by U.S. health care systems and philanthropies as a nonprofit, nonstock, public interest corporation; AMPAC Fine Chemicals, a U.S.-based custom manufacturer of APIs and registered intermediates; and the Medicines for All Institute, founded in 2017 at the Virginia Commonwealth University College of Engineering, with funding from the Bill & Melinda Gates Foundation, to reimagine drug manufacturing processes and provide open access to the resulting technologies to manufacturers around the world.
Under the contract, the government and Phlow are developing a prioritized list of APIs and finished medicines that are critically needed now, according to HHS. The industry partners will then provide U.S.-based capacity to produce the APIs and chemical compounds necessary for the ingredients, as well as the finished drugs.
The contract immediately enabled Phlow and its team to deliver more than 1.6 million doses of five essential generic drugs used to treat COVID-19 patients to the U.S. Strategic National Stockpile, according to Phlow. The delivery included antibiotics, pain drugs and sedatives for patients requiring ventilator support.
The industry partners also have begun manufacturing chemical precursor ingredients, APIs and finished dosage forms for more than a dozen essential medicines used to treat patients hospitalized with COVID-19-related illnesses. Many of the drugs are in shortage and previously had to be imported.
In addition, Phlow is building the country’s first Strategic Active Pharmaceutical Ingredients Reserve, which will serve as a long-term national stockpile securing key ingredients needed to manufacture the most essential medicines domestically.
All the drugs and APIs produced under the contract will be manufactured at U.S. facilities, including a new plant being built in Virginia, HHS said. The team will use “flow” chemistry and other continuous advanced manufacturing processes to lower production costs, reduce waste and improve yields. In addition, the contract calls for the team to transfer novel continuous manufacturing technology to organizations or businesses designated by the U.S. government.
“In the midst of this pandemic, America needs a reliable source of high-quality, domestically manufactured, affordable pharmaceuticals and their key ingredients,” Phlow President and CEO Eric Edwards said. “This advanced manufacturing capability will significantly fortify our nation’s pharmaceutical supply chain for critical medicines.”
Although such technologies can increase the quality, safety and volume of drugs, they have not been widely adopted by generic drug companies to date. The low profit margin on generic drugs can be a disincentive to modernize manufacturing processes. Consequently, 63% of U.S. drug shortages involve generic drugs, and quality problems are by far the biggest reason for the shortages.
Currently, more than 80% of APIs and chemical ingredients used in the U.S. to manufacture generics and over-the-counter drugs are produced abroad, with the majority coming from China and India. Much of that manufacturing entails dated processes that may be prone to delays and compliance issues, which can be a challenge when companies need to ramp up production during an emergency.
Shipping ingredients or finished drugs also can be challenging. As COVID-19 has shown, when an emergency is global, individual countries may close their borders and restrict or prevent the export of critical APIs and drugs.
“The COVID-19 pandemic has reminded us how health threats or other sources of instability can threaten America’s medical supply chains, potentially endangering Americans’ health,” HHS Secretary Alex Azar said in announcing the new effort with the Phlow-led team.
Peter Navarro, director of the White House Office of Trade and Manufacturing Policy, agreed. “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,” he said. He called the BARDA contract with Phlow and its partners a defining moment for protecting the country from current and future public health threats.
Although FDA officials and other experts have been sounding the alarm for years about the U.S. reliance on foreign drug and API manufacturing, it’s taken a global pandemic to get the attention of Congress. In the few months since COVID-19 first appeared in the U.S., federal lawmakers have introduced a myriad of bills to incentivize or require domestic manufacturing of essential drugs and APIs.
In the wake of Congress’ unplanned shutdown for the pandemic, few of those bills have advanced in the long process of becoming law. One exception is H.R. 4866, the National Centers of Excellence (NCE) in Continuous Pharmaceutical Manufacturing Act, a bipartisan bill that would appropriate $80 million annually from fiscal 2021 to 2025 to establish NCEs to work with the FDA and industry to craft a national framework to implement continuous manufacturing. The funding also would support additional R&D of the technology, workforce development, standardization, and collaboration with manufacturers in the adoption of continuous manufacturing.
The intent of the legislation is to encourage advanced manufacturing in the U.S., reducing the dependence on foreign sources for APIs and finished drugs. The House Energy and Commerce Subcommittee on Health voted to advance the bill to the full committee March 11. The next day, Congress shut down.