$354M BARDA Contract for Pharmaceutical Manufacturing Goes Unfulfilled

In May 2020, Phlow Corp. received $354 million to bring inexpensive generic pharmaceutical manufacturing to the United States. At the time, it was one of the largest coronavirus-era contracts to be issued, and the company had existed for less than a year before receiving it. Two years later, the organization has accomplished only minor goals and failed to reach continuous domestic manufacturing for the generic medications it promised in 2020.  

Phlow was awarded the initial contract through the Biomedical Advanced Research and Development Authority (BARDA), and the company received an additional $87 million contract in December 2021. In a statement to POLITICO, Dan Hackman, Phlow’s chief business officer, said that the company and BARDA were pleased with their progress, and they expect to open two US pharmaceutical manufacturing plants in the next 6–18 months. Currently, the company and its connection to the previous presidential administration are under investigation by the House Select Subcommittee on the Coronavirus Crisis.  

One month before the award of the Phlow contract, the Department of Health and Human Services (HHS) replaced Rick Bright, BARDA’s longtime director, and repositioned him to oversee coronavirus testing platforms at the National Institutes of Health. Bright later claimed his demotion was due to public opposition to certain unproven coronavirus treatments.  

The Phlow BARDA contract has since been overshadowed by massive contracts issued to create a coronavirus vaccine. It’s estimated that the agency has already spent a total of $19.3 billion on vaccine development and deployment.  

Moderna alone received nearly half a billion dollars from BARDA to create its version of the coronavirus vaccine. Pfizer, AstraZeneca, J&J, Novavax, Sanofi, and Merck also received millions or billions in funding to do the same.  

Phlow’s goal of providing low-price generic drugs is commendable and would save Americans money on healthcare spending. Studies from as far back as 2016 have indicated that Medicare Part D is overpaying for medications and could save billions if generic drugs were available. 

Boosting domestic capabilities for pharmaceutical manufacturing also helps increase the availability of medications and reduce costs in some cases. Post-pandemic, the federal government and several pharmaceutical companies have invested in making more drugs within the United States. One recent example is Eli Lilly’s $2.1 billion Indiana plant that will create the active ingredients used in several therapies that were previously manufactured overseas.