US Signs 1 Trillion Won Contract with Domestic Generic Drug Company... 'Initiating Independence from China and India'

[Asia Economy Reporter Naju-seok] The U.S. government has signed a contract worth approximately 1 trillion won to establish a domestic supply chain for pharmaceuticals and related products. The U.S. Department of Health and Human Services (HHS) has signed the largest-ever contract with an American generic drug manufacturer on the condition that generic COVID-19 treatments and pharmaceutical raw materials be produced domestically.

Alex Azar, U.S. Secretary of Health and Human Services [Photo by EPA Yonhap News]

According to the Wall Street Journal (WSJ) on the 19th (local time), Phlow, a generic drug manufacturer based in Virginia, signed a $354 million (434.5 billion won) contract with the Biomedical Advanced Research and Development Authority (BARDA) under HHS to manufacture pharmaceutical raw materials and drugs used in COVID-19 treatments. This contract could extend to $812 million over 10 years.

This contract attracted attention as it marked the beginning of relocating pharmaceutical production facilities back to the U.S. (reshoring of manufacturers). Peter Navarro, Director of the White House Office of Trade and Manufacturing Policy, highly praised the significance of this contract, stating, "For a long time, the U.S. has relied on overseas manufacturing and supply chains for essential medicines and medical materials, putting the health and safety of Americans as well as national security at risk."

According to Bloomberg News, currently, 80% of the drugs prescribed in the U.S. are produced overseas in countries such as China and India. This has put the U.S. at risk of drug shortages domestically when demand surges during infectious disease outbreaks like COVID-19. In particular, the U.S. Department of Defense mentioned in a congressional report last August that the military relies on drugs from China, labeling this dependence as a national security threat. In fact, when the COVID-19 pandemic began, some countries banned the export of pharmaceuticals and related products.

The specific pharmaceuticals and raw materials that Phlow will produce have not been disclosed. Eric Edwards, CEO of Phlow, said, "(The drugs and materials produced) had been dependent on overseas imports even before the COVID-19 pandemic, and supply was insufficient," adding, "Because it could harm national security, we cannot disclose exact details."

Alex Azar, HHS Secretary, commented on the contract, saying, "Through cooperation with the private sector, HHS has been able to rebuild domestic capabilities to protect itself from health threats by establishing a domestic pharmaceutical raw material manufacturing base, while also creating jobs for Americans."

This content was produced with the assistance of AI translation services.