I Will Be Hopeful -- But I Will Also Be "From Mizzou" -- On This One...

Okay -- first the positives: it is not a for-profit entity. It appears to have no direct links to Trump cronies. [It is astonishing that we even need to type that, but it is a real concern for most other federal government contracts, awarded since Mr. Obama left office.] And the need for such an initiative is. . . real. We've written about it for. . . over a decade -- twelve years, to be exact.

Even so, awarding such a long-term and large contract to a newly-formed company. . . raises some concern. And the mission is. . . truly daunting. So place me in the "show me" state's company.

As just one example, of dozens (not naming names, due to attorney / client privilege issues), there are essential drug raw ingredients, or APIs as they are known in the trade, that are made from pig intestine by-products (in China, at present) -- ones that require hundreds of thousands of pigs, as the "feeder stock". China butchers and sells these low-quality (as potential food-stuffs) pigs, in its domestic markets, after the intestines are harvested. That makes the operation cost effective. There are for each vat of API -- hundreds upon hundreds of hours of labor, in reducing the raw intestine products to a pharmaceutical grade API, per meaningful 100 dose retail batch -- from all that feeder stock. [The raw math makes it impossible to make a profit on the API alone -- not if you are going to pay trained techs to run the chemistry needed, at US level wages.]

It is clear even absent the COVID problems at meat packing plants, US consumers have little appetite to pay for very low quality, tough gristle-laden pork. It is also clear that few communities out east want the stench of a 100,000 head pig farm anywhere near them. But the farms will need to be near the rendering facilities, as freshness is an issue for this process.

Yes, the issues are. . . daunting. But I will. . . remain hopeful. From the nascent company's press release, then, a bit:

. . . .Phlow, a U.S.-based, public benefit drug manufacturing corporation, has received federal government funding of $354 million for advanced manufacturing of America's most essential medicines at risk of shortage, including medicines for the COVID-19 pandemic response.

This project has been funded with federal funds from the Biomedical Advanced Research and Development Authority (BARDA), part of the office of Assistant Secretary for Preparedness and Response (ASPR) at the U.S. Department of Health and Human Services (DHHS). The total contract value awarded to Phlow is up to $812 million which includes a four-year base award of $354 million with an additional $458 million included as potential options for long-term sustainability. . . .

Here's to hoping. . . but we do have an existing contract manufacturing network industry in the US. Not clear this effort will be able to better that approach's outcomes. But I'll be. . . an optimist, just the same.

नमस्ते