Case Studies Civica

Civica Investment Strengthens Essential Medicines Partnership in Petersburg

Civica HQ_CaseStudy

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.

With its welcoming partnerships, central location along I-95, and growing life sciences workforce, we are thrilled to build our new facility in Virginia. In addition, our partnership and co-manufacturing location with Phlow and AMPAC will be instrumental in our efforts to simplify what is typically a very complex supply channel. This is a dream come true for Civica and our hospital partners as we work together to stabilize the supply of quality medicines for patients across the country.

Martin VanTrieste President and CEO (2018-2022)

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. 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, Civica is constructing its first in-house pharmaceutical manufacturing operation in Petersburg adjacent to Phlow’s future operation and AMPAC’s existing facility. The Civica plant will manufacture vials and syringes of injectable medicines used for COVID-19 patient care, emergency rooms, surgeries, and the treatment of serious infections and hypertension, which will be shipped to hospitals across the country.

Civica is investing $124.5 million in a 120,000-square-foot state-of-the-art manufacturing facility and creating 186 new jobs, and AMPAC announced plans to invest $25 million to expand its operation and create 156 new jobs in May 2021.

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 solidify 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 will benefit 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 business climate ranked as the best in the country by Business Facilities in 2021.

Now 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.