[Ip-health] BARDA offers a tiny startup up to $812M to create a US-based drug manufacturer — and the CEO comes with a price gouging controversy on his résumé – Endpoints News

James Love james.love at keionline.org
Tue May 19 10:02:22 PDT 2020


Best read on the endpoints web page.

Wow, this is a big contract to a small apparently well connected company,
with White House backing.  The story quotes Peter Navarro.

Jamie

* Phlow is based in Richmond, VA and the CEO is Eric Edwards, one of the
two twin brothers who founded Kaléo, a tiny drug manufacturer which makes
Evzio, an injectable product that uses naloxone to treat drug overdoses.


https://endpts.com/barda-offers-a-tiny-startup-up-to-812m-to-create-a-us-based-drug-manufacturer-and-the-ceo-comes-with-a-price-gouging-controversy-on-his-resume/

John Carroll

@johncendpts

BARDA offers a tiny startup up to $812M to create a US-based drug
manufacturer — and the CEO comes with a price gouging controversy on his
résumé

BARDA has tapped a largely unknown startup to ramp up production of a list
of drugs that may be at risk of running short in the US. And the deal,
which comes with up to $812 million in federal funds, was inked by a CEO
who found himself in the middle of an ugly price gouging controversy a few
years ago.

The feds’ new partner — called Phlow — won a 4-year “base” contract of $354
million, with another $458 million that’s on the table in potential options
to sustain the outfit. That would make it one of the largest awards in
BARDA’s history.

In turn, Phlow is promising to fulfill a large manufacturing agreement,
making at-risk drugs and “chemical precursor ingredients, active
pharmaceutical ingredients (APIs), and finished dosage forms for over a
dozen essential medicines to treat hospitalized patients with
COVID-19-related illnesses. Many of these medicines are in shortage and
have previously been imported from foreign nations,” according to their
statement out Tuesday morning.

Phlow is based in Richmond, VA and the CEO is Eric Edwards, one of the two
twin brothers who founded Kaléo, a tiny drug manufacturer which makes
Evzio, an injectable product that uses naloxone to treat drug overdoses.

Back in 2016, Kaléo raised the price of a two-pack of Evzio from $937.50 to
$4,687.50, a 550% price hike that triggered one of a series of price
gouging scandals that attracted the attention of lawmakers, sparking a
letter from more than 30 outraged senators and a “60 Minutes”
investigation. Express Scripts sued the company, claiming profiteering and
more than $14 million in fees. The biotech later slashed the price in the
face of the controversy.

Edwards was working as head of R&D at Kaléo at the time, according to his
LinkedIn page, which also lists him as a co-inventor of the company’s
products.

The deal is almost certain to raise questions in Washington. Why did the
Trump administration turn to a no-profile startup to do large scale drug
manufacturing? The field is dominated by a slate of global contract
manufacturers, but they source drugs and API from a worldwide supply chain.
The US-centric Trump wants a home-based and home-built operation, one that
can continue to work despite pandemics or any other threats to the supply
chain.

Peter Navarro

“Years from now, historians will see this innovative project as a defining
moment and inflection point for protecting American families‑—and our
country—from current and future public health threats,” said Peter Navarro,
director of the White House Office of Trade and Manufacturing Policy, in a
statement. “For far too long, we’ve relied on foreign manufacturing and
supply chains for our most important medicines and active pharmaceutical
ingredients while placing America’s health, safety, and national security
at grave risk. We are now moving swiftly in Trump time to forge an American
solution, one that leads with American ingenuity, American workers, and
American factories all dedicated to ending our drug shortages and expanding
drug manufacturing infrastructure for a healthy and secure future.”

But the contract comes just days after ex-BARDA chief Rick Bright appeared
in front of lawmakers, blasting HHS officials for what he called cronyism
and claiming they favored a well connected consultant, forcing him on
occasion to back the wrong companies making dangerous products. In
particular, Bright accused officials of removing him from his post after he
opposed investments in hydroxychloroquine, a malaria drug that was being
repurposed for Covid-19.

The FDA has since raised warnings about the dangers associated with the
drug — though President Trump startled everyone yesterday with the news
that he had been taking it on a daily basis.


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