Trump Administration Promises Huge Loan for Kodak to Develop
Posted: Tue Jul 28, 2020 6:49 pmWHITE HOUSE - The U.S. government says it will use the Defense Production Act to help transform a legacy photographic film maker into a producer of pharmaceutical ingredients, including those for hydroxychloroquine, the anti-malarial President Donald Trump has touted as a treatment to ward off the coronavirus.
President Donald Trump speaks during a news conference at the White House, July 28, 2020, in Washington.
“Today I’m proud to announce one of the most important deals in the history of U.S. pharmaceutical industries,” Trump told reporters in the White House briefing room Tuesday afternoon.
Kodak will receive a $765 million loan under the Defense Production Act to launch a pharmaceuticals company, creating hundreds of jobs, Trump said.
It is not a done deal, however, according to the White House.
A letter of intent has been signed and final negotiations continue under which the U.S. International Development Finance Corporation (DFC) will make the loan.
The DFC is supposed to focus on loans for overseas projects as an alternative to China’s “Belt and Road” infrastructure initiative.
Democratic Party members of Congress are questioning why the DFC is taking on a domestic role for which it was not intended.
Once fully operational, Kodak is to have the capacity to produce 25% of the generic active pharmaceutical ingredients necessary for all nonbiologic and nonantibacterial pharmaceuticals used in the United States, according to the White House.
Currently, 90% of all prescriptions written in the country are for generic drugs, which Trump said on Tuesday “can be just as good as the brand names but cost much less.”
Less than 10% of the active pharmaceutical ingredients for such drugs sold in the United States are made domestically, with “more than 50% made in India and China,” the president said.
Kodak, which declared bankruptcy in 2012, was once a household name in America and much of the world — having a virtual monopoly for much of the 20th century on photographic and motion picture film in North America and elsewhere.
“It was one of the great brands in the world,” Trump said. “Then people went digital, and Kodak didn’t follow.”
The 132-year-old company will work with the U.S. government and manufacturers to identify the products most needed to meet national security requirements, the White House said.
"What we have with this project and Kodak may be one of the greatest second acts in American industrial history,” Peter Navarro, the White House trade adviser, said earlier in the day.
“It’s a breakthrough in bringing pharmaceutical manufacturing back to the United States,” Trump said.
Kodak’s stock price, which tripled during regular trading hours Tuesday, rose another 40% after Trump’s remarks.
The White House said the support for Kodak’s new venture will be the 33rd time this administration has used the Defense Production Act, amounting to $3.2 billion, “to provide critical support for essential medical resources and our defense industrial base.”
Kodak CEO Jim Continenza told the Democrat & Chronicle newspaper in the company’s hometown of Rochester, New York, that the firm has “a long, long history in chemical and advanced materials — well over 100 years” and its existing infrastructure will allow the new venture “to get up and running quickly.”
FILE - New York Governor Andrew Cuomo speaks during a daily briefing amid the coronavirus pandemic, in New York City, July 13, 2020.
Trump gave rare praise to New York’s Democratic governor, Andrew Cuomo, for supporting the initiative.
The two politicians have feuded recently over responses to the coronavirus pandemic, with Cuomo commenting that if the Trump administration had done its job, the virus would not have come to New York.
Cuomo released a statement Monday about the Kodak initiative, saying “that all too often we heard these materials were made in China or made in India. America could not provide for her own needs. That just cannot happen again."