President Trump has awarded a major contract to a Virginia company to manufacture Covid treatments in the U.S.

The $354 million four-year contract was awarded to Virginia-based Phlow Corp. by Health and Human Services’ Biomedical Advanced Research and Development Authority to make pharmaceutical ingredients and medicines related to the coronavirus. The company says it is manufacturing ingredients and finished dosage forms for more than a dozen medicines to treat the virus, many of which are in short supply and were previously made in India and China and imported.

“This is an historic turning point in America’s efforts to onshore its pharmaceutical production and supply chains,” White House trade adviser Peter Navarro said, adding that the contract “will not only help bring our essential medicines home but actually do so in a way that is cost competitive with the sweatshops and pollution havens of the world.”

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The contract could potentially be extended to $812 million over 10 years.

“The United States’ drug supply chain is broken, becoming dangerously dependent upon foreign suppliers for our most essential generic medicines,” Phlow’s website states, a sentiment echoed by Republican lawmakers who have urged the U.S. to limit its currently heavy dependence on foreign medical supply chains. The outsized role of China, where the coronavirus outbreak began, in supplying basic drugs like penicillin and ibuprofen has come under particular scrutiny.

The administration plans to release a statement on Tuesday announcing the contract in which HHS Secretary Alex Azar calls the contract “a significant step to rebuild our domestic ability to protect ourselves from health threats.”

Under the contract, Phlow will lead several other private sector companies including Civica Rx, Ampac Fine Chemicals and the Medicines for All Institute.

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