May 20, 2020

HHS launches a $345M effort to prevent Covid-related drug shortages

Daily Briefing

    HHS on Wednesday announced that the federal government has granted a $345 million contract to the U.S. drugmaker Phlow to produce more than a dozen generic drugs and their ingredients in an effort to avert shortages of medications that providers frequently use to treat patients with Covid-19.

    Tomorrow: Your 45-minute Covid-19 update

    US Covid-19 cases surpass 1.5M, death toll tops 91K

    The announcement comes as U.S. officials as of Wednesday morning had reported 1,536,400 cases of Covid-19, the disease caused by the new coronavirus—up from 1,515,300 cases as of Tuesday morning.

    As of Wednesday morning, officials also had reported a total of 91,937 U.S. deaths linked to the new coronavirus—up from 90,295 deaths reported as of Tuesday morning.

    Public health officials are concerned the country's number of Covid-19 cases and related deaths will once again spike in coming weeks as states move to reopen nonessential businesses and ease social distancing measures that had been in place to curb the new coronavirus' spread. As of Wednesday, all 50 states have started to scale back restrictions intended to curb America's Covid-19 epidemic.

    HHS contracts with US drugmaker to produce generic drugs, ingredients

    Meanwhile, HHS on Wednesday announced that department's Biomedical Advanced Research and Development Authority (BARDA) has entered into a four-year agreement with Phlow—a start-up, public benefit drugmaker based in Virginia—to produce active pharmaceutical ingredients (APIs), chemical compounds, and generic drugs needed to address the epidemic.

    According to Reuters, BARDA had released an open request in regards to the contract, and Phlow, which already produces dozens of medicines that providers are using to treat hospitalized patients with Covid-19, responded with a drug-manufacturing proposal. HHS said the contract can be extended for a total of 10 years and total up to $812 million.

    HHS said BARDA's four-year agreement with Phlow aims to alleviate and prevent shortages of the drugs providers are using to treat hospitalized patients with Covid-19, and the federal government is working with Phlow to create a list of APIs and treatments that are most in need. According to Inside Health Policy, many of the treatments that currently are in short supply are produced in China and India, where the global Covid-19 pandemic has interrupted manufacturing.

    According to HHS, Phlow under the initial four-year contract will manufacture the specified APIs, chemical compounds, and generic drugs at advanced manufacturing facilities using processes intended to produce higher yields, less waste, and lower costs, such as continuous manufacturing, instead of the traditional step-by-step approach that pharmaceutical companies typically use.

    Eric Edwards, Phlow's president and CEO, said the company during the initial contract will create "rapid surge" capabilities for needed medications and ingredients that are in short supply and build advanced manufacturing facilities to produce them.

    HHS said Phlow also will partner with AMPAC Fine Chemicals, Civica Rx, and the Medicines for All Institute at the Virginia Commonwealth University's College of Engineering to secure essential medicines. Further, Phlow will seek to build up a Strategic Active Pharmaceutical Ingredients Reserve, which will serve as a long-term stockpile of ingredients needed to produce essential medications, Inside Health Policy reports.

    HHS Secretary Alex Azar said, "America has the capabilities, resources, and expertise to secure our medical supply chains; now the Trump administration is providing the leadership to make it happen. 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."

    Trump mulls whether some Covid-19 waivers should become permanent

    Separately, President Trump on Tuesday signed an executive order directing federal agencies to develop a list of regulatory waivers and flexibilities his administration has issued in response to the Covid-19 epidemic that could help the economy if they became permanent.

    The executive order directs federal department and agency heads to consider whether they should extend any of the emergency authorities they used during the country's Covid-19 epidemic to support the federal government's economic recovery response. For instance, the order asks HHS officials to consider continued use of its enforcement discretion to not penalize providers, hospitals, and others who have not complied with certain regulatory requirements during the public health emergency but had made attempts to do so.

    According to Inside Health Policy, some provider groups already have expressed support for extended some of the flexibilities the Trump administration has allowed in response to the Covid-19 epidemic.

    For example, the Association of American Medical Colleges (AAMC) recently asked CMS to make certain Medicare telehealth regulations issued during the crisis permanent. The group in a letter sent to CMS Administrator Seema Verma wrote, "We recognize that the current flexibilities are limited to the [Covid-19] public health emergency … however, given the massive changes that have occurred as well as the improvements to patient access and patient satisfaction, these changes cannot be rolled back with the push of a button, nor should they be" (Itai, Washington Post, 5/19; Wilkerson, Inside Health Policy, 5/19 [subscription required]; HHS release, 5/19; Klar, The Hill, 5/19; Erman/Banerjee, Reuters, 5/19; Stein, Inside Health Policy, 5/19 [subscription required]; New York Times, 5/20).

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