WASHINGTON (AP) — Eastman Kodak will receive a federal loan of $765 million to help reduce reliance on other countries for ingredients in generic drugs.
Kodak Pharmaceuticals will make critical pharmaceutical ingredients that have been identified as essential but have lapsed into chronic national shortage, as defined by the Food and Drug Administration.
The government loan will help support startup costs needed to repurpose and expand Kodak's facilities in Rochester, New York, and St. Paul, Minnesota.
The Kodak unit will have the capacity to produce up to 25% of the active pharmaceutical ingredients needed to make generic drugs in the United States, President Trump said Tuesday.
"We must never be reliant on a foreign nation for America's medical or other needs," Trump said at the White House.
Shares of the onetime photography giant, based in Rochester, more than tripled on the announcement by the U.S. International Development Finance Corp.
Kodak has branched out to offset the large-scale loss of its film business due to electronic photography. Adam Boehler, who heads the IDF, said he learned that the company was interested in creating a startup that could supply ingredients for pharmaceuticals.
"If you look at drugs, 90% of the drugs that we take today are generics, and they are almost all made overseas," Boehler said in an interview on CNBC. "The dominant manufacturer of ingredients for generics is China, and No. 2 is India. And so, we said if we're going to re-shore and bring things back and we're going to have safety and security going forward, we need to change that."
A thoroughly researched 2019 book, “Bottle of Lies: The Inside Story of the Generic Drug Boom,” by Katherine Eban, revealed pervasive corruption and safety problems in the Indian drug industry, and lax enforcement by the U.S. Food and Drug Administration. Aside from faked purity tests, failed purity tests, and failure to perform tests, Eban reported that when batches of generic drugs failed tests, the companies sometimes shipped them to the Third World, particularly Africa.
Trump called Kodak "one of the great brands in the world … then people went digital and Kodak didn't follow."
In a statement, IDF said that once it is fully operational, Kodak Pharmaceuticals would support 360 direct jobs and an additional 1,200 indirectly.
Joe Biden has been criticizing the Trump administration for not pressing more companies into production of ventilators and other critical medical and protective equipment during the virus pandemic under the Defense Production Act. The law gives the president emergency authority to take a range of options, including prioritizing orders from the federal government as well as offering loans.
Trump has countered that his use of the authority has been effective enough to save lives by "removing obstacles in the supply chain." He said Tuesday it was the 33rd time he has invoked the Defense Production Act.
By KEVIN FREKING
Courthouse News contributed to this report.
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