Healthcare providers are sick of price gouging and drug shortages – so as a means of taking on the pharmaceutical industry, hundreds of American hospitals and healthcare workers are creating their own not-for-profit drug company.

The company, Civica Rx, is being officially launched to help patients by addressing shortages and high prices of lifesaving medications. Since the initiative was announced in January 2018, more than 120 health organizations representing about a third of the nation's hospitals have contacted Civica Rx and expressed a commitment or interest in participating with the new company.

The seven organizations currently acting as the governing members of the company, including Mayo Clinic, SSM Health, and Intermountain Healthcare, represent about 500 U.S. hospitals. The U.S. Department of Veterans Affairs (VA) will also work in consultation with Civica Rx to address its particular needs. Other health systems participating with the company will be announced later this year.

Several major philanthropies have also joined the collaboration as a means of further supporting and safeguarding the company's not-for-profit, social welfare mission.

Civica Rx has identified 14 hospital-administered generic drugs as the initial focus of the company's efforts. It will be an FDA-approved manufacturer and will either directly manufacture generic drugs or sub-contract manufacturing to reputable contract manufacturing organizations.

Martin VanTrieste, former chief quality officer for Amgen, one of the world's largest pharmaceutical companies, has been named CEO of Civica Rx – and he will be managing the position without compensation.

"We are creating a public asset with a mission to ensure that essential generic medications are accessible and affordable," said VanTrieste. "The fact that a third of the country's hospitals have either expressed interest or committed to participate with Civica Rx shows a great need for this initiative. This will improve the situation for patients by bringing much needed competition to the generic drug market."

Civica Rx will first seek to stabilize the supply of essential generic medications administered in hospitals, many of which have fallen into chronic shortage situations, putting patients at risk. The initiative will also result in lower costs and more predictable supplies of essential generic medicines, helping ensure that patients and their needs come first in the generic drug marketplace. The company expects to have its first products on the market as early as 2019.

Research into the actual costs of manufacturing and distributing generic drugs suggests that, in many instances, prices for generic drugs used in hospitals can be reduced to a fraction of their current costs. This can save patients, and the healthcare systems that care for them, hundreds of millions of dollars each year.

(Source: Intermountain Healthcare)

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