Trump picks little-known U.S. firm to spearhead $354M pandemic drug pact

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The little-known Phlow Corporation is a startup run by a former executive at the troubled drugmaker Kaléo. (Pixabay)

The coronavirus pandemic has exposed cracks all throughout the pharmaceutical industry's global operations––but none so divisive as the supposed U.S. dependence on foreign drugs. The Trump administration is now pledging a huge sum to address that problem, but its choice of partners might raise some eyebrows.

The Trump administration has floated a four-year, $354 million contract with a fledgling company, Phlow Corporation, to build a generic medicine and active pharmaceutical ingredients (API) plant in Richmond, Virginia and supply COVID-19 treatments produced there.

The massive deal, awarded by the Biomedical Advanced Research and Development Authority (BARDA), can be expanded up to 10 years and a total of $812 million, making it among the largest in BARDA's history. It's part of the administration's push to boost drug manufacturing on U.S. soil, the U.S. Department of Health and Human Services said in a release.

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To fulfill the government deal, Phlow has teamed up with CivicaRx, a generics maker started by hospitals fed up with rising drug prices, and API supplier AMPAC, among others. CivicaRx and its partners will manufacture the finished dosage forms of essential medications, including vials and syringes. 

The small company portrays its work in explicitly nationalist terms: In an online mission statement, for instance, Phlow said it intends its work to "help our nation secure its own strategic drug reserve ... and to reduce the U.S.’s dependency on foreign supply chains."

Phlow said the U.S. partnership "immediately enabled" the company to deliver 1.6 million doses of five generic drugs used to treat hospitalized COVID-19 patients, including sedatives for patients on ventilators, to the U.S. Strategic National Stockpile, the company said in a release. Those doses were sourced for CivicaRx. 

Phlow will also work to create the first-ever "Strategic Active Pharmaceutical Ingredients Reserve," to act as a backup in case of future emergencies.

The government's decision immediately raised questions on its thinking. Not the least of which: Why bankroll an expensive new plant when an entire industry of contract manufacturers exists at a potentially cheaper cost?

Another concern? Some of Phlow's leadership has a less-than-stellar track record on drug pricing. 

RELATED: After blitzing Mylan, Klobuchar targets Kaléo's pricey Auvi-Q, 700% jack-up on opioid antidote

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