The Trump administration plans to ease or eliminate shortages of critical medicines for COVID-19 patients by increasing U.S. production of their active ingredients and the chemical compounds needed to make them, HHS said on Tuesday.
Phlow Corp. will lead the project, which includes building a new Virginia facility. The effort will use advanced manufacturing processes, including continuous manufacturing, to make drug ingredients.
"The team will be able to rapidly provide U.S. healthcare systems with finished, sterile, injectable generic medicines at risk of shortage," HHS said in a statement.
According to the agency, HHS' industry partners will have to share their "novel continuous manufacturing process" with businesses or organizations picked by the federal government. That should ensure that more U.S. suppliers would be able to make the ingredients going forward.
The four-year agreement will pay $354 million to the Phlow-led team and could be extended up to 10 years at a total cost of $812 million.
During the COVID-19 pandemic, essential medicines have been in short supply because there's been a sudden spike in demand worldwide. Most active ingredients for critical drugs—or the chemical compounds they're based on—are manufactured outside the U.S.
Now providers and public officials are rethinking their supply chains, which have relied on a handful of suppliers in a few countries to produce critical ingredients. Larger national stockpiles, increased hospital supplies, greater domestic production and diversified supply chains are key tactics and strategies that could make medical supply chains more resilient.
Some industry insiders argue that health systems and governments have misused Lean management techniques in their attempts to cut costs, making recent supply chain issues even worse.