Trump Awards Virginia Company Phlow $354 Million Contract to Make COVID-19 Drugs

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Heavy/Getty The company would be responsible for manufacturing the chemicals needed for COVID-19 drugs.

Phlow, a Richmond-based pharmaceutical company specializing in drug manufacturing, was awarded a four-year $354 million federal contract for manufacturing the ingredients for COVID-19 drugs, according to a press release from the Department of Health and Human Services. The four-year contract could reach up to $812 million, given an additional $458 million in potential options, according to the Richmond-Times Dispatch.

The agreement was made between HHS’s Biomedical Advanced Research and Development Authority. The authority’s acting director, Dr. Gary Disbrow, said the partnership would reduce the likelihood of drug shortages and speed up treatment opportunities.

“Working with the private sector, HHS is taking a significant step to rebuild our domestic ability to protect ourselves from health threats by utilizing American-made ingredients and creating new American jobs in the process,” HHS Sec. Alex Azar said.

Phlow will be leading a team of pharmaceutical companies and manufacturers, including AMPAC Fine Chemicals, Civica Rx, and the Medicines for All Institute at the Virginia Commonwealth University’s College of Engineering (VCU), according to HHS. AMPAC Fine Chemicals is a California-based manufacturer and Civica Rx is a nonprofit medication supplier with its headquarters based in Utah.

The organizations will produce a “strategic active pharmaceutical ingredient reserve,” or SAPIR. According to the Richmond Times-Dispatch, this will be the nation’s first such program.

What Is Phlow?

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According to the company’s website, “Phlow was formed to manufacture low-cost, high quality, essential generic drugs for the United States.” The company also described itself as a “public benefit pharmaceutical manufacturing company,” according to CBS News.

Phlow’s CEO, Eric Edwards, earned his medical and doctoral degrees in pharmaceutical science at VCU. He and his brother originally founded Kaléo in 2004, which went on to create Evzio, Auvi-Q, an injection to reverse anaphylaxis (life-threatening allergic reactions).

Robby Demeria, Phlow’s chief of staff, is the former deputy secretary of commerce and trade for technology and innovation under Virginia’s Gov. Ralph Northam. Demeria helped craft legislation for the Virginia Innovation Partnership Authority and he used to be the executive director of the Richmond Technology Council called RVATech.

Robert “Bob” Mooney, the company’s chief financial officer, is a co-founder and co-partner of the venture capital firm NRV and he is also the former CFO and vice president of Ethyl Corp.

According to the Richmond Times-Dispatch, the chemical production process could create roughly 350 jobs at Phlow’s pharmaceutical plant in Petersburg.

Phlow And VCU Will Work Together To Create COVID-19 Drug Chemicals

Two years ago, VCU received a $500,000 grant to help speed up the manufacturing of generic drugs; the grant came from GO Virginia, or Virginia Growth and Opportunity initiative, which would provide $14.6 million for the state’s economic resilience and recovery grant program.

VCU’s Medicines for All Institute will work closely with Phlow, helping create a domestic supply of pharmaceutical ingredients, which the Trump administration and Phlow’s CEO have been adamant about doing.

“What has happened is the threat of pandemics like COVID-19 have exposed the heavy reliance on foreign manufacturing,” Edwards told the Richmond Times-Dispatch. “We are not saying you do not need a global supply chain for pharmaceuticals in this country … We are saying it is critical that the United States protect and secure domestic manufacturing for the most critical pharmaceuticals in case something disrupts our supply chain.”

Peter Navarro, director of the White House’s Office of Trade and Manufacturing Policy, echoed that sentiment in an interview with The Atlantic.

According to Reuters, Phlow has already delivered 1.6 million doses of five generic medicines meant to treat COVID-19 patients. The company also said it wants Virginia to be the site of advanced manufacturing capabilities, including sterile injectable manufacturing facilities.

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