The Trump Administration Wants To Subsidize Domestic Drug Manufacturing. The First Contract Looks Like a $350 Million Grift.
The Trump administration just handed a $350 million contract to a relatively unknown Virginia-based pharmaceutical company that doesn’t have any history of mass producing pharmaceutical drugs and appears to have been founded this year for the purpose of cashing in on protectionist politics.
The contract is one of the largest ever given by the federal government to a single pharmaceutical company, according to BioPharma Dive, a trade publication. “While that’s noteworthy in itself,” it noted, “it’s made more so by the fact that Phlow is a relatively unknown entity in the drug manufacturing world.”
Indeed, the company was only founded in January. Despite that, a Phlow spokesman told BioPharma Dive that the company’s leaders had been “communicating with government officials about the U.S. pharmaceutical supply for more than a year” and that Phlow’s “stated mission” is “reducing the U.S.’ dependence on foreign supply chains.”
Phlow Corp. “has no track record in drug manufacturing, and it’s not clear when its assembly lines will begin churning out products,” Politico reports. The whole arrangement leaves the impression that the contract awarded to Phlow Corp. has more to do with politics than pharmaceuticals.
Nevertheless, White House officials called this week’s deal with Phlow Corp. a “landmark” accomplishment, according to The Washington Post. “This is a great day for America,” White House trade advisor Peter Navarro told the paper. “This has all of the elements of the Trump strategy.”
If that’s true, then President Donald Trump’s strategy looks a lot like crony capitalism built on a misunderstanding of economics and trade—specifically, the global trade in pharmaceutical products. The Phlow Corp. contract will inject millions of taxpayer dollars into a single company, but the effort is unlikely to do much to reshape those pharmaceutical supply lines. It is perhaps the best signal yet that the protectionism sought by Republican neo-nationalists is just corporatism in a new wrapper.
Even setting aside the possibility of cronyism, the deal is both unnecessary and likely to be ineffective.
Ineffective because a few hundred million dollars won’t address the biggest obstacle to manufacturing drugs in the
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