In May this year, the US International Development Finance Corporation (DFC) Chief Executive Officer was delegated authority under the Defense Production Act to partner with the private sector in response to the unprecedented COVID-19 pandemic.
However having read Andrew Edgecliffe-Johnson’s opinion piece (“The curious story of Kodak’s pivot to pharma”, August 12) we were surprised to see his mischaracterization of the DPA loan program as picking winners and losers. Unlike government contracts that may go to one company over another, one does not “win” a loan; one qualifies for a loan. A loan to one company is not to the exclusion of a loan to another company. Similarly, unlike contracts where the government is purchasing goods or services for government consumption, loans under DPA require repayment on competitive terms and produce items for general consumption.
Mr Edgecliffe-Johnson however assumes that DPA loans should be reserved for the benefit of companies that are already invested in healthcare. Under DPA, government financing is statutorily authorised only when access to private capital on reasonable terms is unavailable. The reality is, many large pharmaceutical companies have no trouble obtaining private capital. Accordingly, the DPA loan programme is focused on identifying creative and innovative solutions where government support is the only viable option for moving a project forward.
Finally, the DPA loan programme has a growing pipeline of dozens of applications for critical projects to develop or strengthen healthcare supply chains at home. These applicants are in various stages of our stringent diligence process, and we are eager to work with the private sector and our partner agencies to identify innovative ways to create a healthier country. This unprecedented time calls for unprecedented steps.
Misinformation about these efforts will only stifle those otherwise willing to raise their hand to help.
David Glaccum
Counsel to the Chief Executive,
US International Development Finance Corporation
Washington DC, US
