Case Studies Civica
Civica Investment Strengthens Essential Medicines Partnership in Petersburg
Pharmaceutical Companies Join Forces to Establish Supply Chain for Affordable Drugs in United States
Nonprofit generic drug company Civica Inc. launched in Utah in 2018 to address the problem of chronic generic drug shortages and high drug prices by providing quality, affordable generic medicines across the U.S. At the time, the company had no idea just how important its work would soon become.
The COVID-19 pandemic exposed major flaws in the essential medicines supply chain in the United States. A single medication could start as raw materials from several countries around the world, which are processed into basic chemicals. These are then turned into active and inactive ingredients, possibly with dozens of distributors or manufacturers, before everything is finally combined into a medicine ready to be administered to patients. There could be 100 steps in total, many of them often occurring outside the United States, and each step represents a chance for an interruption.
To address this critical issue, a new partnership in Virginia began to take shape, combining innovative manufacturing techniques with a commitment to strengthening the supply chain for quality, American-made essential medicines — and Civica would be a key partner.
The Virginia Solution
An Emerging Pharmaceutical Manufacturing Hub
An essential medicines collaboration started to develop in Virginia in 2020 with the establishment of Phlow Corporation, a public benefit corporation affiliated with the Medicines for All Institute (M4ALL) at Virginia Commonwealth University’s (VCU) College of Engineering. M4ALL, established in 2017 with funding from the Bill & Melinda Gates Foundation, develops techniques and processes to make medicines using continuous manufacturing, a largely automated process that costs more to implement than traditional batch manufacturing processes, but offers significant savings and efficiency benefits over the long run.
Leaders from Civica and M4ALL had been worried about the pharmaceutical supply chain as far back as 2018, but COVID gave the issue a new urgency. Former Civica President and CEO Martin VanTrieste and M4ALL CEO Dr. Frank Gupton joined forces with Dr. Eric Edwards, former chief science officer of Richmond-area drug manufacturer Kaléo, to form Phlow Corporation.
In 2021, Phlow secured a $354 million contract from the Biomedical Advanced Research and Development Authority to manufacture essential medicines for the Strategic National Stockpile and start the first Strategic Active Pharmaceutical Ingredient Reserve to provide a long-term supply of the key ingredients used to manufacture essential medicines.
As a strategic partner in the initiative with Phlow, M4ALL, and AMPAC Fine Chemicals, in January 2021 Civica announced plans to establish a 140,000-square-foot state-of-the-art facility to manufacture sterile injectable drugs in the City of Petersburg adjacent to Phlow’s future operation and AMPAC’s existing facility. In addition to manufacturing essential medicines hospitals use daily, the $140 million plant will manufacture and distribute insulins that will be available to people with diabetes at significantly lower prices than insulins currently on the market. Just a few months later, AMPAC announced a $25 million investment to expand its operation and create 156 new jobs. The Civica plant will convert active pharmaceutical ingredients from AMPAC and Phlow into vials and syringes of finished medications for use in hospitals.
Civica’s facility has three manufacturing bays able to fill 90 million medicine vials and make up to 50 million pre-filled syringes annually, employing about 190 once fully staffed. Civica expects to start producing insulin there in 2022 with output slated to first hit the market in 2024.
Civica also is planning a new laboratory testing facility at Meadowville Technology Park in nearby Chesterfield County. The company will construct a 55,000-square-foot facility to support the Petersburg manufacturing operation through quality testing and development of new products, creating 51 new jobs. In addition, it will host a scale-up manufacturing facility operated by M4ALL, which will create additional employment. Civica’s new laboratory is expected to be operational soon after the Petersburg plant reaches commercial scale in 2024.
This critical partnership between Phlow Corporation, Medicines for All Institute, Civica, and AMPAC will further advance the pharmaceutical cluster that has emerged in Petersburg and solidifies Virginia as a significant player in domestic drug manufacturing.
A Workforce Jump-Start and other Virginia Advantages
The use of VCU-refined manufacturing techniques isn’t the only Virginia-related advantage that benefits Civica and AMPAC. Support for the companies’ job creation is being provided through the Virginia Talent Accelerator Program, a workforce initiative created by VEDP in collaboration with the Virginia Community College System. Launched in 2019, the program accelerates new facility startups through the direct delivery of recruitment and training services that are fully customized to a company’s unique products, processes, equipment, standards, and culture. All program services are provided at no cost to qualified new and expanding companies as an incentive for job creation.
A Petersburg base offers a strategic location close to Interstates 85 and 95, within a manageable drive of the major population centers on the East Coast. Access to The Port of Virginia was also a winning factor, along with the Commonwealth’s top-notch workforce and educational institutions, high quality of life, and a top-ranked business climate.
Leaders in the partnership are excited for the possibilities that the cluster in Petersburg offers — not only shoring up a shaky domestic supply chain for essential medicines, but also proving the efficacy of continuous manufacturing and creating a new model for American pharmaceutical manufacturing in Virginia.