One thing both the Trump and Biden administrations have agreed on is that the U.S. needs to expand domestic manufacturing, and soon.

The pharmaceutical industry in particular has outsourced much of its manufacturing to take advantage of lower costs and more lax environmental laws in other countries. This has left Americans reliant on overseas drugmakers, largely in India and China, and vulnerable to gaps in the supply chain when quality issues or a pandemic halts production.

This is where the United States Pharmacopeia, a nearly 200-year-old organization that creates standards for the industry, and Phlow Corp. come in. They are laying the groundwork for the industry to upgrade manufacturing equipment that requires a smaller footprint and fewer workers, making U.S. drug production more likely, the partners said Monday.

The modernized equipment allows for a nearly uninterrupted manufacturing process that experts say can produce higher-quality drugs more cost effectively than through current clunky production techniques. The new technology is referred to as continuous manufacturing and without it “there’s just no way with U.S. labor costs it would make sense,” USP Chief Executive Officer Ronald Piervincenzi said.

USP will work alongside Phlow researchers at the Medicines for All Institute, based at Virginia Commonwealth University in Richmond, which uses advanced drug-making equipment, USP and Phlow said. Workers will develop standards for measuring drug quality using the newer equipment.

Drugmakers, particularly those that manufacture low-cost generic medications, have shied away from this investment partly because it’s unclear if the U.S. Food and Drug Administration would accept new calculations for how standards are met. Generics account for 90% of the drugs Americans take yet the companies don’t have the large research and development budgets of brand-name drugmakers.

USP’s involvement is crucial because the organization sets the standards for the older manufacturing method, which the FDA references when reviewing applications.

COVID-19 Treatments

Phlow was formed last year by a group of pharmaceutical executives and in May was awarded $354 million by the Trump administration to help produce COVID-19 treatments made in the U.S. The company’s early efforts stand in contrast to a $765 million government loan the Trump administration gave Eastman Kodak Co., known for producing cameras, to make domestic drugs.

The loan to Kodak was put on hold after concerns were raised when trading in its stock picked up the day before the official announcement of the loan was made in July.

Americans’ reliance on foreign-made medicine has gradually become more of a concern and is being examined by lawmakers on both sides of the aisle in Congress. Early last year as the coronavirus began to spread in the U.S., crucial drugs were in short supply and the industry dealt with fallout from manufacturing halts in China.

“To address the fragile supply chain, we must invest and sustain domestic critical health-care manufacturing,” Greg Burel, former director of the U.S. Strategic National Stockpile, told House lawmakers at a hearing earlier this month. “Continued domestic manufacturing is a national security imperative.”

The Pentagon raised similar concerns after recalls involving millions of blood pressure pills made in China and India that were contaminated with ingredients that could cause cancer. Quality problems are the reason for about two-thirds of drug shortages, Piervincenzi said.

Continuous Manufacturing

With continuous manufacturing, drugmakers work with smaller amounts rather than mixing several hundred kilograms at once, said Atul Dubey, USP’s director of pharmaceutical continuous manufacturing. Working with smaller amounts changes the calculus for mixing drug ingredients and cuts down on the use of solvents that are dangerous if not removed from the final product.

Phlow Chief Executive Officer Eric Edwards said the company is researching using continuous manufacturing techniques to make a generic version of a diuretic that is in short supply, which he declined to identify. With the older bulk method, the process of making the key ingredient involves seven steps. Through continuous manufacturing, Phlow has reduced that to three steps and lowered the production cost by 40%, Edwards said.

Phlow is looking at continuous manufacturing for half a dozen drugs in short supply and USP will work with the company to develop quality standards that will be shared with the industry, he said. The company expects to submit its first application to the FDA next year for a domestic-produced drug made with the new methods, Edwards said.