At the beginning of July, the US government’s Biomedical Advanced Research and Development Authority (BARDA) gave $354 million to a drug company to fight the pandemic. Its other big investments, which by now have topped a few billion, have gone to established American companies like Corning for glass vials and Pfizer for future vaccines.
But this grant was different. It went to a Richmond, Virginia-based public benefit company that was just seven months old. Before the pandemic, it hadn’t manufactured any drugs, although its founders were pharmaceutical veterans.
The company, named Phlow, isn’t tasked with making new drugs against Covid-19. Instead, its goal is to shore up the US supply of generic drugs.
The US relies on foreign manufacturers for the vast majority of its pharmaceuticals—and Covid-19 has stretched that vulnerable, fragmented supply chain to its breaking point. Many generic antibiotics, painkillers, and sedatives—including propofol, one of the anesthesia drugs needed to keep patients with severe Covid-19 on ventilators—have gone into shortage since the beginning of the pandemic.
The government wants to reduce the country’s reliance on drugs that are primarily made abroad. But traditional models of pharmaceutical manufacturing aren’t up for the task. In an industry as conservative as drug making, it takes something as world-shattering as a pandemic to try something different—and a huge investment in an unknown company to make it happen.
The traditional way of making pharmaceuticals is a lot like making spaghetti sauce, says chemical engineer Frank Gupton, a co-founder at Phlow. It’s called batch manufacturing, and it involves putting in all the ingredients needed for a drug into a giant vat at once. A little chemical cooking later, and you should have a big supply of the final product before you can start the process over again.
While this process produces safe, consistent results, it isn’t very efficient. A single batch of drugs may normally produce 60 kg (roughly 120 pounds) of chemical waste, says Gupton. And, if there are any mistakes, the entire batch has to be discarded. It’s expensive to do in the US, but cheaper in countries like India and China, which is why the supply chain was so global to begin with.
The alternative—the one that Phlow is attempting—is called continuous manufacturing. Instead of one batch after another, it turns all the chemical reactions into more of an assembly line, which reduces waste and ultimately cost. Manufacturers can alter the drug as it goes through each reaction (Phlow gets its name from the type of chemistry this requires, called flow chemistry). It happens on a smaller scale, too, which means that equipment takes up less physical space, and that manufacturers can monitor the drug at every step of the way and tinker with it if need be.
In a lot of cases this means figuring out how to make individual chemical reactions more efficient, Gupton explains. If you go back to your high school chemistry days, you’ll recall the two tried and true methods of increasing the yield of most chemical reactions: heat and pressure. Generally, that’s what Phlow’s been figuring out how to do.
Continuous manufacturing has been a goal of the US Food and Drug Administration for over a decade. So far, though, no major pharmaceutical company in the world is making their products using this process from end to end. So what’s kept companies from trying it out? Fear of failure.
“When you’re a pharmaceutical company, you’re afraid of regulatory risk,” says Richard Braatz, a chemical engineer at the Massachusetts Institute of Technology who specializes in drug manufacturing.
In the United States, this risk comes from the Food and Drug Administration. In 1962, the agency required all drug companies to prove that their products were safe and effective through the three-stage clinical trial process still used today. Drug companies encounter most of their costs in launching products as they go through these trials: They have to continue to make large amounts of a product that ultimately never may be sold. In 2018, the top 20 drug companies in the US had a 32% success rate.
A lot of drug development is figuring out not just the ingredients, but the process it takes to assemble them, says Blaatz. So companies aren’t going to want to change the way they make their products if at all possible. Manufacturing procedures haven’t been intentionally updated for over 50 years.
In recent years, however, the US FDA has seen the value of continuous manufacturing. Two years ago under commissioner Scott Gottlieb, the agency began creating guidance for the industry on how to adopt the process to manufacture their existing drugs.
But even with regulatory guidance, for an existing drug company, the cost of retooling the manufacturing for a product they already have would be too high. It’d take too long for the final, cheaper product to make up for those high investment costs.
Gupton had made this process work for HIV and tuberculosis drugs with his previous initiative at the Virginia Commonwealth University, called Medicines for All. To get off the ground, he had help from the Bill and Melinda Gates Foundation in 2017. He’s hoping he can do it again with the help of government funding for Phlow.
Eric Edwards, the chief executive and another co-founder of Phlow, declined to say specifically which drugs Phlow is working to make. Its real end goal is to help create a Strategic Active Pharmaceutical Ingredients Reserve—a stockpile of pharmaceutical necessities similar to the US’ Strategic Petroleum Reserve.
It’s not just an issue of undermining costs of cheap labor from Chinese and Indian-based companies, Edwards says. “We’re competing with the Chinese government and the Indian government,” he says. He views pharmaceutical independence as a matter of national security.
It’s hard to say just how successful Phlow will be at achieving that kind of independence. So far, it has produced 1.6 million doses of generic antibiotics, painkillers, and sedatives—all of which are critical for hospitalized patients, and many of which have gone into shortage.
But it’s a shoestring operation in some ways: Currently, it’s licensing equipment and space from the companies AMPAC Fine Chemicals, a US chemical company, and Civica Rx, a nonprofit generic drug manufacturer. It plans to use some of the investment from BARDA to develop its own facilities.
The company’s investment from BARDA also includes the possibility of receiving an additional $458 million over the next decade if its early endeavors are successful. If its strategy works, it could lead to a bigger overhaul how the US makes and delivers drugs, in-house.