The US needs to broaden its options for drug supply by on-shoring its medicines and active pharmaceutical ingredients (API) manufacturing to reduce reliance on overseas production, according to Dr Frank Gupton, Department Chair, Chemical and Life Science Engineering (Virginia Commonwealth University) and co-founder of pharma start-up Phlow Corporation.
Gupton said that while he did not see a problem with importing drugs and APIs from overseas, “the problem we have is we don’t have options. It’s not a question of importing or in-country manufacturing it’s the ability to have both those capabilities in the event that something happens like the COVID-19 incident, so you’re not totally dependent on one or the other.”
Back in May, the US government signed a $ 354 million contract with Phlow to manufacture generics and APIs needed for drugs in short supply, including COVID-19 treatments, in a move to create the nation’s first strategic stockpile of key ingredients and reduce its dependence on overseas supply.
The four-year contract, awarded by the Biomedical Advanced Research and Development Authority, could be extended up to USD 812 million over ten years, making it one of the largest awards in BARDA’s history. Under the terms of the agreement, Phlow will lead a team of private sector entities that includes API and intermediates manufacturer Ampac Fine Chemicals, Civica Rx and the Medicines for All Institute.
Gupton said that more than 80% of generics currently consumed in the US are produced overseas, adding that the issue went far beyond the formulation stage and required a complete end-to-end solution.
“When you start looking at the overseas suppliers, they’re vertically integrated back to fairly simple starting materials,” he said. “In order to be able to address this issue, if you have to import those starting materials, you have the same vulnerability you would have had you looked further down the supply chain.”
When asked why this was perceived as such a problem in the US, given that European countries such as the UK and France – which are not global centres of drug manufacturing – don’t have perceived drug supply issues, Gupton said the US had been hampered by a “race to the bottom on cost.”
“What’s happened is as the costs go down and the margins shrink, it becomes less desirable to produce these drugs,” he said. “Several years ago, the US instituted these cost controls for drugs where they did actually shrink the margins on the profits of these generics and you saw a mass exodus of drug manufacturing for those specific drugs and the number of drugs in short supply in the US spiked.”
Gupton said that drug shortages in the US were nothing new and that the current COVID-19 pandemic had “shone a light on this whole supply chain issue, because it existed long before then.”