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Kodak tapped to be leader in US prescription drug manufacturing

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A file photo of Kodak's office building in Rochester, N.Y.. The company has received a federal loan to shift resources toward generic drug manufacturing. (WHAM)

ROCHESTER, N.Y. (WHAM) — Eastman Kodak Company is poised to be on the forefront of a federal initiative to shift production of generic prescription drugs to the U.S., including some used in the fight against COVID-19.

A $765 million federal loan through the U.S. International Development Finance Corporation (DFC) will be given to Eastman Kodak to produce pharmaceutical products in Rochester and at the company's facility in St. Paul, Minnesota.

The goal is to ramp up production of pharmaceutical products in the U.S. to the point where the country is able to produce a full 25% of the active pharmaceutical ingredients that are necessary to make generic medicines. The process will be a long-term operation that ramps up over the course of 5-8 years to the point that 25% mark.

"This issue is not a partisan issue; it’s an American issue,” said Adam Boehler, CEO of DFC.

Kodak will be adding on 360 jobs directly to assist in that process with another 1,200 indirect support jobs, according to White House Director of Media Affairs John Horseman. Details on what type of indirect support jobs and an exact number were not made available.

Dr. Peter Navarro, director of the Office of Trade and Manufacturing Policy, said by the end of this year they aim to have 300 million doses of the coronavirus vaccine for the U.S. He praised Kodak for its impressive facilities and said it will be an example of a comeback company.

"This is going to be one of the greatest second acts in American industrial history,” Navarro said. "It's got a fine team of chemists, and expertise rooted in the great tradition of Kodak in terms of making film, and they couldn't be more excited about this deal and the White House couldn't be more excited about the deal."

Eastman Kodak CEO Jim Continenza said the company will be shifting its focus to production of pharmaceutical ingredients 30% to 40% of its business, according to a report in the Wall Street Journal. The company will create a new division called “Kodak Pharmaceuticals."

"Kodak is an iconic American company, and in the process of a total remake," said Continenza.

The production will be housed at Eastman Business Park.

Pharmaceutical drugs start with the manufacturing of chemical components, which are then turned into active pharmaceutical ingredients, also known as APIs, which are then turned into pills, capsules, and liquid injections.

The new Kodak Pharmaceuticals is capable of covering the first two manufacturing steps, a key part of what makes the deal work.

"The beauty of the Kodak project is that it spans two of the three stages of production...," said Navarro. "It's going to be the first big step - but not the last step - towards American pharmaceutical independence."

Virtually all of the prescription drugs sold in the U.S. are manufactured overseas, in countries with low-cost labor. The Trump administration says high-tech manufacturing techniques Kodak is known for, plus continuous production, will produce affordable alternatives while employing Americans.

New York Governor Andrew Cuomo praised the partnership in a pre-recorded video message, saying this is how the federal government should be using the Defense Production Act.

"Let's create jobs. Let's keep America safe. Let's do it together," Cuomo said.

“Our residents created a legacy working at Kodak to provide world-class products and countless memories for people throughout our nation and our world,” said Rochester Mayor Lovely Warren in a statement. “Now, we will get another opportunity to show the world our ingenuity and quality again through Kodak Pharmaceuticals. I look forward to more Rochesterians going to work and building a new chapter in our shared history.”

Monroe County Executive Adam Bello praised the decision, as well, calling it a "forward-thinking initiative" that will "showcase the best of Monroe County."

Rep. Joe Morelle added his support, saying, "The implications of this are huge—everyday American families should not have to empty their bank account for medicine they need to survive. It is my hope that Kodak can start paving the way to making this a reality for all."

News of the decision started to trickle out a day earlier on Monday when President Donald Trump traveled to Fujifilm in North Carolina - one of Kodak's biggest rivals - to award it $265 million to expand COVID vaccine manufacturing.

"We are mass-producing all of the most promising vaccine candidates in advance, so that on the day one that it's approved, it will be available to the American people immediately," Trump said.

The president calls the effort to develop a vaccine "Operation Warp Speed". The effort also includes theraputicals to treat the virus such as drugs like Remdesivir, which has been found to be effective.

And that is when he hinted about future announcements that could include Kodak.

"We have numerous treatments, right now, that are under study, and I think over the next couple of weeks, we may actually have some very positive answers as to that," he said. "I think it’s unparalleled. Never been done before, but we suspect it’s going to work and work very well."

According to federal officials, Americans use about 40% of the world’s supply of bulk materials used to make generic prescription drugs. Of that supply, just 10% is manufactured in the U.S.

The last time an economic initiative for Rochester was announced with fanfare from the White House was in July 2015 when then-Vice President Joe Biden came to Rochester to tout the launch of the new photonics center in the region. The announcement promised $610 million in public-private investment to next-generation photonics manufacturing.

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