By Michael Erman and Ankur Banerjee
(Reuters) - U.S. President Donald Trump's administration awarded a contract worth up to $812 million for a new U.S. company to manufacture drugs and drug ingredients to fight COVID-19 on American soil, aiming to end dependence on other countries.
The administration has been looking to build up the ability to produce drugs and their raw materials in the United States after the global pandemic exposed the industry's dependence on China and India for its supply chain.
"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 a statement.
The U.S Department of Health and Human Services said on Tuesday that it had awarded a 4-year, $354 million contract to privately-held Phlow Corp to make COVID-19 drugs, other essential drugs and their ingredients. The contract can be extended for up to $812 million over 10 years.
Phlow, which was incorporated in January, said the contract will help it contribute to a national stockpile of active pharmaceutical ingredients for essential medicines.
It said it had already started making pharmaceutical ingredients and finished dosage forms for over a dozen essential medicines to treat hospitalized patients with COVID-19-related illnesses. It has delivered over 1.6 million doses of five essential generic medicines used to treat COVID-19 patients to the U.S. Strategic National Stockpile.
Many of these medicines are in shortage and have previously been imported. India and China account for a vast majority of active pharmaceutical ingredients used to make drugs in the United States.
Phlow has partnered with other groups including Civica Rx, Ampac Fine Chemicals and the Medicines for All Institute to manufacture the medicines.
All pharmaceutical products by Phlow will be made in the United States, according to the company's website. The company said it is working to build advanced manufacturing capability in Virginia, as well as sterile injectables manufacturing facilities.