Richmond Times-Dispatch: Richmond-area pharmaceuticals industry could benefit from national strategic reserve legislation


New legislation co-sponsored in Congress by Rep. Abigail Spanberger, D-7th, would direct the federal government to create a national strategic reserve of ingredients for essential medicines, a step that could bolster the development and manufacturing of pharmaceutical products in the Richmond region.

Spanberger on Monday afternoon introduced a bill called the Promoting Readiness and Ensuring Proper API Reserves of Essential Medicines Act, known as the PREPARE Act.

Joined by local academic and business leaders, Spanberger said the legislation is needed to ensure and maintain a domestic supply of essential medicines. Even before the COVID-19 pandemic, shortages have occurred for some medications because so many active pharmaceutical ingredients, or API, are manufactured outside the United States.

“Right now in the United States, we depend on other countries for a range of pharmaceutical products, including many active pharmaceutical ingredients that are essential for creating generic prescription drugs,” Spanberger said during a news conference at Virginia Commonwealth University’s College of Engineering.

About 90% of medications prescribed in the U.S. are generics, but about 87% of the facilities that manufacture the ingredients for those drugs are outside the U.S., Spanberger said.

“Clearly, we really need to reassess our production here at home,” she said. “As we all know far too well, the COVID-19 crisis demonstrated the vulnerabilities of our supply chain.”

Spanberger is introducing the bill along with U.S. Rep. David B. McKinley, a Republican from West Virginia.

“The bill is truly bipartisan, and it is bicameral,” said Spanberger, adding that it also will be introduced in the U.S. Senate by Democratic and Republican co-sponsors.

The legislation would direct the U.S. Department of Health and Human Services to establish a list of essential generic medicines that are necessary to have available at all times. It would also create a national stockpile of active pharmaceutical ingredients for essential generic medicines to support emergency preparedness.

The legislation does not have a specific funding amount tied to it yet, but it could have a major impact on one pharmaceutical development and production project in the Richmond area.

Phlow Corp. — which was co-founded last year by Eric Edwards, a Richmond entrepreneur and doctor, and VCU professor and chemical scientist Frank Gupton — is working with several partner organizations to develop a low-cost supply of medicines that face shortages in the U.S. market.

In May 2020, Phlow announced it had received a $354 million federal contract to help build a national reserve of essential medicines and to make active ingredients for more than a dozen medicines used to treat patients with COVID-19.

Phlow has partnered with VCU’s Medicines for All Institute, which Gupton leads, and with AMPAC Fine Chemicals, a pharmaceuticals maker with a plant in Petersburg.

Another partner is Civica Inc., a nonprofit formed by various U.S. health care providers to address chronic generic drug shortages. Civica announced in January that it plans to invest $124.5 million to establish its first in-house pharmaceutical manufacturing operation on Normandy Drive in Petersburg near the AMPAC factory. Construction work is now underway on the Civica plant.

Gupton compared the need for a strategic reserve of medicine ingredients with the nation’s strategic reserve of oil supplies.

“This should be just like the strategic oil reserve,” he said. “You build up that capability in the event that you have some sort of disaster.”

Another issue is the cost of manufacturing drug ingredients, Gupton said.

“What we are trying to do is to figure out how to make them cost effectively,” he said.

The legislation could help support an “economic cluster” focusing on pharmaceuticals development and production in the Richmond area, said Brian Anderson, president and CEO of ChamberRVA, a regional business organization.

“This is completely new,” Anderson said. “This is where Dr. Gupton and the biotech cluster here — Phlow, Civica and all the others — can really go out and not have to compete with any local businesses, but compete with companies around the world, and make this a stronger economic cluster that is going to hire maybe not 10,000 [people] … but will hire 1,000 or 2,000 highly educated, highly competent and highly paid people that will make this the economic region we want it to be.”

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