Three of Connecticut’s economic linchpins — manufacturing, biotechnology and the defense industry — got close attention from Chris Murphy as the state’s junior U.S. senator spent Thursday visiting companies from each of the sectors across the state.
Murphy, a Cheshire resident who is in his first term, began his day in day in Groton at Electric Boat, joining his senate colleague Richard Blumenthal, along with U.S. Rep. Joe Courtney, D-2, Gov. Dannel Malloy and U.S. Labor Secretary Thomas Perez for a workforce training round table.
From there, it was on to Marion Manufacturing in Cheshire, where Murphy talked about the need to eliminate loopholes in the Buy American Act. He also toured Melinta Therapeutics in New Haven, which is developing new types of antibiotics.
Murphy has been championing eliminating loopholes in the Buy American Act, which is supposed to prohibit government agencies from buying foreign-made products when an equivalent U.S. version is available, since he first joined Connecticut’s legislative delegation to Washington in 2006 as U.S. representative from the 5th District.
“Connecticut gets about $10 billion in government contracts each year, but we should be getting a lot more,” Murphy said during his visit to Marion Manufacturing, a Reinhard Road company that makes metal parts used in the cable television, aerospace and automotive industries. Marion Manufacturing doesn’t have any government contracts of it own, but has clients that do, said Douglas Johnson, the company’s president.
The U.S. Defense Department has granted 307,123 waivers and exceptions to the Buy American Act over the last 8 years, and has spent over $176.8 billion of taxpayers’ dollars on goods manufactured by foreign companies. While the number of waivers that the Defense Department has granted has decreased in five out of the last six years, Murphy said it is still too easy to get an exemption the Buy American Act.
“If you can prove that what your buying will be used outside of America, the act does not apply,” Murphy said. “The Department of Defense is trying to save a couple pennies by sending work to China, but overall the government loses out when we do that. It loses jobs, it loses tax revenue.”
Murphy wants federal agencies to do a comprehensive review of the economic impact of such outsourcing.
Johnson said the difference of a few pennies may not seem like much to the general public. But by reworking how Marion Manufacturing produced one of its components shaved two-tenths of a cent from the price, which enabled the company to lure a customer away from a Chinese rival, he said.
“That accounts for 40 percent of our revenue,” Johnson said. “That’s how competitive it is. You can’t make a mistake.”
Murphy said part of the reason for his visit to Melinta Therapeutics is that later this year, the U.S. Senate Committee on Health, Education, Labor & Pensions will undertake an effort to reform how the U.S. Food and Drug Administration operates. Murphy is a member of the committee and the FDA currently is reviewing Melinta’s delafloxacin antibiotic.
Michael Kenston, the company’s chief commercial officer, said delafloxacin is currently in Phase III or large group trials for use in treatment of serious skin infections. The company hopes to get FDA approval for delafloxacin by the end of 2016, Kenston said, and is also beginning trials of the antibiotic for secondary uses in treatment of urinary tract infections and pneumonia.
Drugmakers have already benefitted from the 2012 GAIN Act, which stands for Generating Antibiotic Incentives Now, he said.
“The GAIN Act has created a clearer pathway for specific kinds of drugs,” Kenston told Murphy. “Working with the FDA has changed night and day from 10 years ago.”
One of the provision of the GAIN Act was extending by five years the exclusivity period during which certain antibiotics — those that treat serious or life-threatening infections — can be sold without generic competition. Adding to the exclusivity period allows antibiotics makers more time to recover the costs associated with developing the drugs.
Murphy said Melinta Therapeutics is emblematic of the kind of knowledge-driven business that will spur economic growth in New Haven for years to come.
“If companies like yours don’t succeed, we’re in trouble,” Murphy said.
Melinta Therapeutics, which until October 2013 was known as Rib-X Pharmaceuticals, was co-founded in 2000 by Dr. Thomas Steitz, the Sterling Professor of Molecular Biophysics at Yale University. It relocated from space in New Haven’s Science Park complex to 50,000 square feet in 300 George St. in 2002.
Melinta Therapeutics has 33 workers in New Haven with an additional 12 employees located in suburban Chicago.