Monday evening the U.S. government signed a $354 million four-year contract with new pharmaceutical company Phlow Corporation to increase American production of medications that may help treat Covid-19 in a bid to avoid potential supply chain shortages, with the potential to extend the contract to $812 million for the next 10 years according to the New York Times.
This is one of the largest-ever grants awarded by America’s Biomedical Advanced Research and Development Authority, also known as BARDA.
Phlow plans to make drugs via a technique called “continuous manufacturing,” widespread in other industries but still novel for pharmaceutical companies.
Most pharmaceutical companies make medication in batches, pausing for quality control measurements and transferring components of the medication to other machines or even other countries in order to finalize production of a medication.
Continuous manufacturing involves nonstop production within the same facility, which can save time and more quickly respond to drug shortages, though this can increase upfront costs.
Phlow had previously signed a $6 million contract from the U.S. Department of Health and Human Services in April to secure a supply of medications and active pharmaceutical ingredients at risk of shortage due to the Covid-19 pandemic.
Phlow’s CEO Eric Edwards cofounded the Richmond, VA-based company in January, with Dr. B. Frank Gupton, an engineering and chemistry professor at Virginia Commonwealth University. Gupton heads the Medicines For All Institute, founded in 2017 at VCU and backed by a $25 million grant from the Bill & Melinda Gates Foundation. Prior to Phlow, Edwards was a cofounder at Kaleo, a pharmaceutical company he cofounded with his twin brother in 2008.
The FDA estimates that almost 40% of finished drugs in America and about 80% of active pharmaceutical ingredients are made overseas.
“There are not a lot of people wanting to bring back generic medicine manufacturing to the United States that has been lost to India and China over decades,” Edwards told the Times, “You need someone like the federal government saying this is too important for us not to focus on.”