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The Trump administration said on Tuesday that it would extend a $765 million loan to Eastman Kodak Company to begin producing critical pharmaceutical components, in an effort to allay American dependence on foreign countries for essential medicines.
The project relies on funding by the Defense Department, which will be channeled to the film giant through the U.S. International Development Finance Corporation, a development bank set up by the Trump administration to replace the Overseas Private Investment Corporation.
The unusual arrangement leverages the Defense Production Act, a Korean War-era law that gives the government vast powers and resources to direct certain kinds of production in the interest of national security. In an executive order in May, President Trump gave the International Development Finance Corporation, which typically funds projects in poorer countries, the authority to use the Defense Production Act to help in the response to the coronavirus pandemic.
The investment is “the beginning of American independence from our pharmaceutical dependence on foreign countries,” Peter Navarro, the director of the White House Office of Trade and Manufacturing policy, said in an interview with Maria Bartiromo on Fox Business Network. He said that the facility and a companion factory in Minnesota would eventually produce a quarter of the active pharmaceutical ingredients for generics needed in the United States.
The project will be set up in the Eastman Business Park in Rochester, N.Y., and will support 360 direct jobs, the company said.
The pandemic has revealed the extent to which domestic companies rely on foreign suppliers, which may be risky in industries like pharmaceuticals, said Kaitlin Wowak, a professor at Notre Dame’s Mendoza College of Business.
“Having domestic companies such as Kodak start producing key ingredients for generic drugs allows domestic pharmaceutical companies significantly more control over the supply chain,” she said.
Article source: https://www.nytimes.com/live/2020/07/28/business/stock-market-today-coronavirus