US space industry struggles with ‘constitutional crisis’ in quest to bring shipments back to Earth

Western Air Force bases could become ports of entry for pharmaceuticals manufactured in space if Congress approves this year’s massive defense omnibus.

Under the House’s version of the National Defense Authorization Act (NDAA), Western missile ranges could someday enable a steady stream of new cargo returning to Earth: parachute-borne orbital labs carrying lucrative and highly potent forms of existing drugs.

Those labs are the creation of Varda Space Industries, the first company to successfully carry out commercial space manufacturing — and to date the only commercial space company to bring cargo back to U.S. soil.

As first entrants into orbital manufacturing, Varda is at the forefront of a rapidly evolving and still-confusing dispute within the U.S. government over how to govern America’s nascent commercial space industry — and who should do it.

Space manufacturing is roughly where the internet was in the 1980s, said Ajay Malshe, a professor of mechanical engineering at Purdue University: struggling to emerge from its Cold War legacy of control by the military and academia, and to build the infrastructure — including regulation — that will make future technology possible.

While much of the space economy — from orbital manufacturing to asteroid mining — currently seems outlandish, Malshe said, the operative word is “currently.” Imagine, he said, how hard it would be to project the internet’s trajectory toward the iPhone and the cloud economy from its first stirrings.

The still open-ended nature of space manufacturing’s development is why the House, Senate and White House are in a historic fight over who should control the passage to orbit — and who takes responsibility if a launch or reentry ultimately ends in disaster.

At the core of those questions is a consideration of both the potential benefits of private-industry spaceflight in an age of governmental retreat from the sector, in which deliveries to the International Space Station come from private companies SpaceX and Northrop Grumman, and its very real risks. 

While space is vast, the most valuable parts of orbital real estate are increasingly crowded, and any mishap or disaster in orbit risks spreading junk that makes future missions more dangerous. 

At the extreme end of those dangers lies the risk of Kessler syndrome, “an unintended cascade of space-based destruction which would severely limit — or even close off — human use of the orbit,” as The Hill reported last year.

Further complicating the questions, getting to orbit requires companies to traverse a contested patchwork of regulatory regimes. 

If rockets launch from a military base such as Florida’s Cape Canaveral, they’re under the jurisdiction of the Department of Defense (DOD); on their trip up (or back down), they’re under the watch of the Federal Aviation Administration (FAA); and in orbit, they’re governed by the Federal Communications Commission.

As the federal government struggles to allocate control and responsibility in the emerging sector, the space industry argues it’s being held back by having too many agencies in charge of regulating it.

Varda has, since its founding, been stuck in what representatives portray as a regulatory black hole: Its products can go up, but they can’t easily come down.

Founded in 2020, the California-based Varda makes capsules that ride to orbit on the side of other companies’ rockets, such as those built and operated by Elon Musk’s SpaceX.

According to co-founder and CEO Will Bruey, Varda’s fundamental business is “delta-v arbitrage,” meaning the company sells the ability to expose products or manufacturing processes to wildly different levels of gravity than are accessible on earth.

That means if the military wants to see how a hypersonic missile guidance system would function at 25 times the speed of sound (about 17,500 miles per hour) — a problem that formerly would have required it build a new rocket — Varda can offer the opportunity to put that system in a capsule and send it to orbit on the side of a SpaceX Falcon 9. 

Then there are space drugs. The crystal lattices that make up pharmaceutical molecules form differently under microgravity, which can give existing medications different properties, or make them more potent.

Pharmaceutical giant Merck proved that was possible in the International Space Station’s National Laboratory, where researchers made higher-quality versions of the cancer medicine Keytruda.

At the time, this discovery was a dead end, because the space station is a research institution, not a factory. 

Varda hopes to provide a way forward: Bruey described its orbital capsules as offering the pharmaceutical industry an “off-ramp” to develop similar ideas, in the same way public and private labs across the country do for technology developed at other national labs.

But to offer any such opportunity, Varda needs to be able to reliably get cargo back to its customers on Earth. 

And in trying to do that earlier this year, Bruey said, the company found itself in the middle of “a constitutional crisis” due to the ongoing questions over whose job it is to regulate the commercial space industry’s activity.

Faced with clamor from the space industry to simplify the process of getting into — and back out of — orbit, in 2020, the FAA created a new, streamlined way for companies to apply for a simplified launch and reentry process, called Part 450.

That was the framework under which Varda launched its first payload into space last summer — a mission that was, in one sense, a smashing success for the company. 

The Varda team successfully fabricated a new, more stable crystal form of ritonavir, an Abbott Labs HIV drug notoriously recalled in 1998 because it was so prone to forming rogue crystal lattices that it proved impossible to dissolve in capsules. 

Because that case was so notorious, “to anyone in the pharmaceutical industry, you say, ‘Varda flew ritonavir,’ they know what we’re doing, our business case, our value proposition,” Bruey said. 

And Varda succeeded, showing “we can create a delicate geometric lattice, and a very delicate polymorph in space,” he said.

But when it came time to bring the cargo back from orbit, trouble arose. With FAA permission, Varda had launched without first securing a reentry permit — which last November left the company, suddenly, with a capsule in orbit and no way to bring it down.

Why? Because as the capsule circled the Earth and conditions in the upper atmosphere shifted, shuffling the complex math of reentry, agencies on Earth — principally the FAA and the DOD-run Utah missile range where Varda sought to land — couldn’t agree on who would assume the liability if something went wrong.

Negotiations were complex. “It’s continuous negotiation with continuous communication in a continuous feedback loop from a multiparty system,” Varda co-founder Delian Asparouhov told NBC at the time.

As in many constitutional crises, part of the problem was that the problem itself was so very new. 

While there are commercial spaceports across the Western U.S., Varda’s plan to parachute its capsule down onto the grounds of the Utah Test and Training Range represented the first time that a commercial space company had landed cargo on U.S. grounds — as opposed to splashing down offshore.

The agencies finally agreed all the entities involved would, separately, assume all of the risk: The FAA and commandant of the Utah Test and Training Range each determined they were comfortable with assuming all of the liability if the capsule exploded and debris littered the Utah desert.

That decision only came after lengthy deliberations, however: By the time Varda, the FAA and DOD agreed on a new launch window, the capsule had spent an unplanned six additional months in orbit.

Varda, the FAA and the commercial space industry as a whole viewed that situation as unacceptable. 

In April, the FAA ended the practice of allowing commercial flights to apply for a reentry license in orbit — with reentry missions only subject to approval if they had less than a 1-in-10,000 chance “of taking out an unsuspecting Earthling,” according to space news site Payload.

The debacle also increased calls from the commercial space industry for faster permitting — and ideally, a one-stop shop where a single agency can sign off on a launch and reentry.

As commercial launch and reentry operations get more frequent, range operators and the FAA need to collaborate “to ensure safe and efficient management of the airspace and ground safety around such operations,” Dave Cavossa, president of the Commercial Spaceflight Federation, told The Hill in a statement. 

The FAA itself in March promised to study how to improve the Part 450 launch and reentry guidelines beginning this fall.

“We knew there would be some initial learning and we would need to come back to the drawing board,” Kelvin Coleman, FAA associate administrator, said at the time. 

What a reformed regime to oversee the process looks like remains a matter of bitter debate. On one side, the White House wants the departments of Commerce and Transportation to share authority over authorizing missions. On the other, Reps. Brian Babin (R-Texas) and Frank Lucas (R-Okla.) have also introduced legislation to make it the sole responsibility of Commerce.

Industry, in general, prefers the House version, according to SpaceNews, though this solution is complicated by the fact Commerce doesn’t want the job of monitoring human spaceflight. 

That’s where the dueling copies of the NDAA come in. In the House, which is controlled by the GOP — a party whose 2024 platform promises to “create a robust Manufacturing Industry in Near Earth Orbit” — the version of the bill passed earlier this summer includes language, supported by Varda, that compels the DOD to update and formalize its reentry agreements with the FAA.

That bill would also direct the Air Force and FAA to work together “to ensure new commercial reentry technologies can access test ranges” across the West, whose sprawling expanse makes the test ranges therein far more suited to capsules bouncing down than the more confined territories of Cape Canaveral or California’s Vandenberg, where reentry is technically permitted already.

That language would get the two agencies “thinking and planning about how to streamline that process for commercial reentry operators,” Josh Martin, Varda’s head of government affairs, told The Hill — with the ultimate end of having missile ranges do double duty as “spaceports for reentry.”

Such reform is a long way off, however. While the House has passed its version of the NDAA, the Senate has not — and the Senate version of the NDAA doesn’t include any such language. 

Instead, the Senate version would allow the secretary of any military branch — such as the secretary of the Air Force — to make a launch and reentry deal with a commercial company, so long as that company pays the U.S. military back.

As the battle to determine who is in charge of regulating the industry continues, Varda is landing further afield: at the Koonibba Test Range in South Australia, which offers vast, flat plains like Utah’s as well as an easier reentry environment. From there, company capsules will commute back across the Pacific by freighter.

That would be just as good as landing in the U.S., Bruey said — if not for “national pride.”

The best manifestation of Varda would “land on American soil as much as possible,” he said — ideally “a daily cadence” of pharmaceutical deliveries.

SpaceX, he argued, launches “a Starlink satellite per day on average. There’s no reason that can’t happen from a reentry perspective.”