“Donald Trump’s secret weapon for returning jobs and supply chains to the United States – tax cuts for crony corporations – backfired in a multi-trillion dollar boondoggle that resulted in even more offshoring and stock buybacks. In the throws of his botched coronavirus response, Donald Trump is desperately throwing cash around, with little to no oversight, to the same junk snake-oil salesmen that price gouged vulnerable Americans seeking life-or-death addiction treatment. We all agree that supply chains need to be restored, but for Trump, this is just another get rich quick scheme with the American people footing the tab,” said Kyle Morse, an American Bridge Spokesperson.
ICYMI: Business Insider: The Trump administration gave a drug-making contract worth up to $812 million to a small Virginia firm founded less than 6 months ago
By Tom Porter on 5/20/20
The Trump administration has handed a $812 million contract to a small Virginia firm to boost US production of anti-coronavirus drugs and reduce reliance on foreign pharmaceuticals supply chains.
Phlow, the company in question, was founded in January 2020, which means that it is about to turn six months old. The award is a huge sum for such a new firm.
The Department of Health and Human Services announced the contract in a Tuesday statement.
It said the Advanced Research and Development Authority — which directs federal money to companies countering public health threats — was giving the deal to Phlow, which is based in Richmond.
Dr. Eric Edwards, co-founder and CEO of Phlow, told the Associated Press that many Americans do not realise how dependent the US is on foreign manufacturers for its medicines, a situation Phlow wants to change.
“It’s amazing how many individuals don’t realize how vulnerable our active ingredient supply chain has been,” Edwards said.
According to The New York Times, Phlow will be replicating the function of US companies that already produce the same drugs, but rely on foreign raw ingredients. Phlow aims to source these from within the US.
Health and Human Services Secretary Alex Azar echoed the concern in a statement announcing the contract.
“The COVID-19 pandemic has reminded us how health threats or other sources of instability can threaten America’s medical supply chains, potentially endangering Americans’ health,” Azar said.
According to the health care website Stat News, Edwards has come under scrutiny for his actions with previous ventures.
An earlier company he founded, Kaleo, was investigated by the US Senate for abruptly increasing prices for an opioid overdose treatment by more than 600%. Kaleo was also scrutinized by Senator Chuck Grassley for selling a rival product to the EpiPen for $4,500.
A spokesperson for Phlow told Stat News that Edwards left Kaleo “on good terms more than a year ago and had no oversight of drug pricing during the end of his tenure,” and later amended the statement to say that he had no oversight over drug pricing decisions at all.
Peter Navarro, President Donald Trump’s trade adviser and a noted China critic, told The Wall Street Journal that he had been introduced to Edwards in November by Phlow board member Rosemary Gibson.
Gibson reached out after reading Navarro’s book “Death By China,” which warns of US over-reliance on Chinese pharmaceuticals, Navarro said.
After Navarro dispatched a team to inspect one of its manufacturing plants, the company submitted a proposal in March, according to the Journal.
The initial contract is for $354 million to boost US-based drug supplies over four years.
It includes the option to be extended for 10 years to a total sum of $812 million. That sum would be one of the largest grants ever rewarded by the body.
On its website, the company echoes President Donald Trump’s “America First” rhetoric about reducing US reliance on foreign manufacturing.
Its marketing material says: “The United States’ drug supply chain is broken, becoming dangerously dependent upon foreign suppliers for our most essential generic medicines.”