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WASHINGTON -- The Trump administration said Tuesday that it has awarded a $354 million contract to a Virginia startup that will produce a variety of generic drugs and their ingredients -- including medicines used to treat covid-19 -- at advanced manufacturing facilities in the United States.

White House officials called it a potential landmark in the efforts to return pharmaceutical manufacturing to the United States from overseas.

"It's made in the USA. It's innovation that will allow American workers to compete with the pollution havens, sweatshops and tax havens of the world," said Peter Navarro, a White House adviser who has led the effort to return manufacturing to the United States.

Over the past two decades, most U.S. generic drug production has shifted offshore, notably to sites in China and India. That dependence on foreign suppliers became controversial as the coronavirus pandemic raged, when both countries limited their exports and supplies in the United States ran short.

But some experts questioned whether the White House ambitions for a broader supply chain repatriation were achievable. The environmental and financial considerations that originally drove production of active pharmaceutical ingredients offshore remain compelling, they said.

"The investment that would be needed to restart some of the API business here in the U.S., especially with much more stringent [environmental] and wastewater requirements, it's really unrealistic to think that could be done and still be price competitive," said Susan Capie, managing director of PharmaVantage, a consultancy in Babylon, N.Y.

Phlow Corp. of Richmond will lead a private sector team that will use a continuous chemical process rather than the step-by-step approach of traditional pharmaceutical manufacturing. Ampac Fine Chemicals, Civica Rx, and the Medicines-for-All Institute at Virginia Commonwealth University round out the partnership.

The Biomedical Advanced Research and Development Authority (BARDA), a government agency recently embroiled in controversy over the demotion of its former chief, awarded Phlow the contract.

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During the initial four years, the company will develop a "rapid surge" capability for critically-needed medicines and their ingredients and build advanced manufacturing facilities to produce drugs that are in short supply, Eric Edwards, Phlow's chief executive, said in an interview.

The U.S. imports annually more than $150 billion worth of biologics, human and animal drugs, and medical devices, the Food and Drug Administration said last year.

Some experts were skeptical that Phlow's relatively modest contract will mean much change. "This production has moved abroad for business reasons," said Thomas Bollyky, director of the Council on Foreign Relations' Global Health Program. "So it's going to have to operate [in the U.S.] with a subsidy. The question is: how long are we willing to maintain that subsidy?"

The U.S. still manufactures many cutting-edge biotech drugs, which tend to be more profitable, branded medications. Such drugs, typically delivered by injection or infusion, are produced by genetically modified cells in a complicated process dominated by Western manufacturers.

The chemical synthesis used to make traditional pills, including most generics, is a more routine form of manufacturing that shifted to China and India decades ago.

Capie said China imported most of its drugs before boosting domestic production in the 1980s. "When China started ramping up their own industry, the goal was to be self-sufficient in what they needed rather than having to import," she said.

At the same time, increasing price competition among generic drugs in the West prompted U.S. and European manufacturers to outsource production of those medicines to low-cost factories in Asia, she said.

Business on 05/20/2020

Print Headline: Trump starts try to return medical suppliers to U.S.

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