Risk & Compliance

Trump Administration Unveils Deal to Make COVID-19 Drugs in U.S.

The $354 million project is designed to reduce the country's reliance on drugs and pharmaceutical ingredients from foreign manufacturers.

The Trump administration has announced a project to use $354 million in federal funds from the Biomedical Advanced Research and Development Authority (BARDA) under the Department of Health and Human Services to manufacture generic medicines and pharmaceutical ingredients that are needed to treat COVID-19. Right now, these drugs are being manufactured in overseas, mostly in China and India.

Under the deal, the drug manufacturer Phlow will work to manufacture essential drugs and create an active reserve to reduce dependence on overseas suppliers, the company said.

Phlow said it is working to make doses of five generic medicines deemed essential in treating COVID-19, including medicines used to sedate patients who require ventilators, certain antibiotics, and medicines for pain management.

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It is also building the Strategic Active Pharmaceutical Ingredients Reserve to reduce “America’s dependency on foreign nations to support its drug supply chain,” it said.

The total contract could increase to $812 million over 10 years if an option for an additional $458 million is exercised. If the contract is extended to $812 million, it would be one of the largest awards in the history of BARDA.

Virginia-based Phlow said it was in discussions with the Trump administration dating back to November, but the project was fast-tracked after COVID-19.

“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,” Peter Navarro, director of the White House Office of Trade and Manufacturing Policy, said in the statement from Phlow.

Officials with local health systems say concern over shortages has created competition among health-care providers as the pandemic unfolds, with some hospitals employing teams of workers to contact suppliers in search of necessary medicines.

“It’s like an auction,” Arash Dabestani, senior director at NYU Langone Health in New York, said. “Whoever screams the loudest gets it.”