A fledgling Virginia company was awarded a $354 Million contract, with the potential to be expanded up to $812 million over the next 10 years, to begin producing precursor chemicals used in mainly generic drugs being produced domestically to combat the Corona Virus.
Ingredients to produce the wonder drug HCQ, used for 65 years to prevent malaria, and now found to be effective against Corona Virus, as well as Cancer, Arthritis and Diabetes, would now be sourced from this production facility.
But the contract from the U.S. Department of Health and Human Services (HHS) Biomedical Advanced Research and Development Authority (BARDA) is raising eyebrows because of the track record of company founder and CEO Dr. Eric Edwards.
Edwards states that many Americans do not know how dependent the United States is on foreign manufacturers for its medicines and that Phlow wanted to change that.
“It’s amazing how many individuals don’t realize how vulnerable our active ingredient supply chain has been,” Edwards told the Associated Press.
HHS “will work with a team of private industry partners led by Phlow Corporation of Richmond, Virginia, to expand pharmaceutical manufacturing in the United States for use in producing medicines needed during the COVID-19 response and future public health emergencies,” an HHS statement reads.
Phlow Corporation of Richmond, Virginia was founded less than six months ago. The company won the HHS contract to manufacture raw ingredients in the US for drugs needed to treat COVID-19 patients, according to a CBS News. Edwards founded the firm in January and maintains that it is a “public benefits” company.
U.S. companies already produce the same drugs, but they rely on foreign raw ingredients that Phlow aims to source from within the US, according to Business Insider.
While the contract is a huge sum for such a new and small company, Edwards’ track record also falls under public scrutiny. A cloud of unethical practices still looms above some of the founder’s previous business ventures.
Edwards fell short of benefiting the public in his last foray into the pharmaceutical industry.
A U.S. Senate subcommittee report released in 2018 reveals that another company Kaleo, founded by Edwards and his twin brother, jacked up the price of its Evzio opioid overdose antidote by more than 600% between 2014 and 2017, which cost U.S. taxpayers more than $142 million.
A probe into Kaleo’s business practices was initiated by U.S. Senator Chuck Grassley (R-IA) in 2017 for selling an EpiPen rival product for $4,500.
A Phlow representative told Business Insider that as the CEO of Kaleo, Edwards had no say over the company’s pricing decisions.