A Supply Chain Reaction

Richmond and Petersburg Host a New Pharmaceutical Cluster Making Essential Medicines With Innovative Techniques

The Medicines for All Institute (M4ALL), VCU’s College of Engineering

The COVID-19 pandemic has brought shortages of all kinds to the U.S. economy, from cream cheese and toilet paper to N95 masks and consumer electronics. The supply chain went from a machine working in the background to a catch-all issue. Stores can’t restock fast enough? It’s the supply chain. Will delivery take six weeks? Supply chain. Most critically, in the middle of a public health emergency, a long-simmering problem was exposed: The U.S. supply of essential medicines is unreliable.

Pharmaceutical supply chains are complicated. The details may vary greatly from one medicine to the next, but 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 that’s ready to be administered to patients. There could be a hundred steps in total, and many of them often take place outside the United States.

Each of these steps offers a chance for an interruption, whether a shipment is blocked by a natural disaster, a labor shortage, or for geopolitical reasons. The pharmaceutical supply chain was affected by the pandemic in many ways as lockdowns gripped shipping centers and governments reserved medicines for their own citizens.

To address the insecurity, a new pharmaceutical research and manufacturing hub is growing, anchored by the Virginia cities of Richmond and Petersburg. The cluster began with the Medicines for All Institute (M4ALL) at Virginia Commonwealth University’s (VCU) College of Engineering, which develops more efficient manufacturing processes to provide lower-cost medicinal ingredients, and the public benefit corporation Phlow Corp., which was founded in early 2020 to reduce shortages of essential medicines — high-priority drugs with a great benefit to the population.

Commercial manufacturing comes from nonprofit generic drug producer Civica Inc., which was formed in 2018 to provide a reliable supply of high-quality, affordable essential medicines to healthcare systems, and AMPAC Fine Chemicals (AFC), which produces pharmaceutical intermediates and active ingredients. Also included in the cluster is the nonprofit medicinal standards organization United States Pharmacopeia (USP). Together, these organizations form a streamlined system, capable of developing and implementing new ways of making high-quality, cost-effective medicine, with as much of that process in the United States as possible. Although the coalition is composed of like- minded organizations already addressing generic drug reliability and pricing, much of the new development is in direct response to the COVID-19 pandemic and in anticipation of future needs.

Last year, Phlow secured a $354 million contract from the Biomedical Advanced Research and Development Authority, a federal agency dedicated to preparedness for public health emergencies under the U.S. Department of Health and Human Services. The coalition is contributing to the Strategic National Stockpile (SNS) of essential medicines, and Phlow is starting the first Strategic Active Pharmaceutical Ingredient Reserve (SAPIR) to provide a long-term supply of the key ingredients used to manufacture the most essential medicines on U.S. soil. The contract could be worth up to $812 million in total. Phlow has also helped launch the Children’s Hospital Coalition, a partnership with several children’s hospitals, in an effort to ensure the availability of essential medicines to improve the care of America’s children.

“Our country has an opportunity to completely reimagine our supply chain through novel chemistry, optimizing small-molecule manufacturing to improve yields, drive down costs, and reduce our environmental impact,” said Dr. Eric Edwards, co-founder, president, and CEO of Phlow.

As Martin VanTrieste, president and CEO of Civica and a member of Phlow’s board of directors, put it: “We’re trying to take links out and make [the supply chain] simpler, so that there’s less opportunity for failure.”

To facilitate collaboration, Phlow and USP are building adjoining lab spaces in downtown Richmond’s VA Bio+Tech Park, close to M4ALL at VCU. In Petersburg, 30 minutes south down Interstate 95, Phlow and Civica are forming an advanced manufacturing campus at a site where AFC has been in production since 2017.

A Continuous Process

Making medicines in the U.S. at competitive prices requires finding new ways of producing them. How are those price reductions possible without a drop in quality? “It starts with the chemistry,” said M4ALL CEO Dr. Frank Gupton. “If we have robust, high-yield chemical processes, then we can do a lot of things with the downstream steps and greatly simplify the processes.”

Gupton is involved in many parts of the integration of the Richmond-Petersburg group. As the chair of VCU’s Life Sciences and Chemical Engineering department, he is helping train a potential workforce at the intersection of chemistry and chemical engineering. At M4ALL, which he helped found in 2017, he has a hand in the development of new continuous manufacturing processes. And as a co-founder of Phlow, he is able to see some of that research implemented in a practical way.

Continuous processes are largely automated. In addition to reducing overall costs, they produce a more consistent product, Gupton said. I contrast to batch processing, which is much more common across the global pharmaceutical industry, continuous processes require an investment of time and money upfront to develop, but they can offer significant savings in the long run. AFC had an extensive history applying continuous processes in the aerospace industry before shifting its focus to pharmaceuticals.

“There’s a lot of pharma companies that don’t implement this manufacturing, mostly because they’re more interested in speed,” said Dr. Bill DuBay, vice president of global research and development at SK pharmteco, AFC’s parent company. “It takes longer to get ready for manufacturing of a continuous process.”

AFC will produce the active pharmaceutical ingredients (API) that go into Civica medicines, as well as those set aside for the SAPIR. Stockpiling API rather than finished medicines has two main advantages, DuBay said. Many drugs can have different deliverable forms, which API can be converted into relatively quickly, so the API are a bit more flexible. API also tend to have longer shelf lives than the ready-to-use formulations, possibly avoiding the waste that occurs when medication goes unused.

USP will help Phlow develop the standards for new production methods, as well as help test that they’re consistently producing medicines within strict margins of quality control. The hope is to apply lessons learned in Virginia to similar continuous processes around the world, which USP sees as a new paradigm in pharmaceuticals.

“Continuous manufacturing is at an inflection point,” said Dennis Hall, vice president of manufacturing services at USP. “We see increasing interest in the technology, and COVID-19’s disruption of the supply chain may be accelerating that pivot.”

Civica has similarly embraced continuous manufacturing and emphasis on a robust supply chain as cornerstones of its business model. In the early days of the pandemic, Civica was able to meet surge demand of up to 400% for some of the 11 COVID-19 medications it produced, and the company also produced 2.1 million vials of COVID-19 medications for the SNS.

At the Petersburg facility — the company’s first in-house manufacturing operation — Civica will produce sterile, injectable medications used in hospitals for COVID-19 patient care, emergency room and intensive care treatments, surgeries, and treatment of other serious conditions.

Rendering of Civica, Inc. Manufacturing Facility, Petersburg

Reshoring to Virginia

U.S. operations will better insulate the U.S. supply chain against any kind of turmoil, even if they’re partially redundant with imported medicines in times when there’s no pandemic restricting trade or suppliers. The Richmond-Petersburg cluster aims to be that sort of end-to-end process, going from raw materials to API and finished medicines entirely within the country. And there’s a parallel movement to create or revive domestic sources of key raw materials, said DuBay. Most common inactive materials such as salts and solvents are typically available from domestic manufacturers.

Much of the new construction and improvements in both Richmond and Petersburg is already underway and should be complete in the second half of 2022 or early 2023. Civica production will begin in earnest toward the end of 2023, after the year it’s expected to take regulatory agencies to review and approve its Petersburg processes and products. Phlow’s construction is underway next door. Between constructing and adapting new facilities and ongoing operations, the cluster will create hundreds of jobs.

“The infrastructure that we’re creating in the Richmond-Petersburg region today will help provide access to essential medicines for all Americans tomorrow,” Edwards said. “Phlow and the world- class partners gathering here are committed to growing an advanced manufacturing campus that attracts highly technical jobs and economic development opportunities while impacting the health of our nation.”

VanTrieste highlighted several benefits to doing business in Virginia, including the centralized Mid-Atlantic location with highway and port access, quality workforce and educational institutions, high quality of life, and a business-friendly atmosphere.

“This is not going to be the only cluster, but it’s going to be a really exciting one,” said Hall. “The excitement and dedication I’ve seen from [the members of the cluster] is important. There’s this great desire to build this into something truly impactful for the region and the country.”

The cluster will supply the SNS and the newly created SAPIR, but its members could also change an industry that is not well suited to the vagaries of material and ingredient availability. When the next pandemic hits, a cache of critical medicines will ensure that spikes in demand are met, while a carefully planned, largely domestic pharmaceutical supply chain adapts to shifting needs. More broadly, these sorts of production improvements could apply to a wide range of essential medicines, creating an affordable, reliable, quality supply.