Hospital groups launch own company to make generic drugs

Hospital groups launch own company to make generic drugs

Civica Rx, as it will be known, will take its first steps toward improving the broken industry by manufacturing 14 generic drugs that are necessary stock at all hospitals but now hard to come by due to nationwide shortages. The Department of Veterans Affairs also will work in consultation with Civica Rx to address its needs. Other health systems participating with Civica Rx will be announced later this year.

In addition, the hospital sector has had to battle with the fact that generic companies have ceased production of some low-profit complex injectables as they attempt to rationalise their own balance sheets.

Joseph Health, SSM Health, and Trinity Health recently announced the official establishment of Civica Rx, a non-profit generic drug company dedicated to providing an affordable, steady supply of generic medications to hospitals and providers.

Launch of Civica's first drug is set for mid to late 2019, with the intention of giving all partners equal access and pricing in a bid to stabilise the market.

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Civica Rx first will seek to stabilize the supply of essential generic medications administered in hospitals -; many of which have fallen into chronic shortage situations.

Seven health systems are stepping up to the plate to tackle two of the healthcare industry's most pressing challenges: drug shortages and rising prescription drug rates. We witness, on a daily basis, how shortages of essential generic medications or egregious cost increases for those same drugs affect our patients. "I am pleased to see our collective commitment to improving the health and well-being of millions of patients come alive through this mission-driven initiative", says John Noseworthy, M.D., president and CEO, Mayo Clinic. Dan Liljenquist, vice-president of the enterprise initiative office at the Utah-based Intermountain Healthcare, told Vantage that a unanimous vote of its members would be necessary to convert Civica from non-profit to profit-making status. VanTrieste has agreed to lead Civica Rx without compensation.

"We are creating a public asset whose mission is to ensure that essential generic medications are accessible and affordable", says VanTrieste. The American Hospital Association will assist the organisation by fielding enquiries from healthcare systems that are interested in participating. "We are confident we can improve the situation for our patients by bringing much needed competition to the generic drug market".

Civica Rx has already attracted interest from more than 120 health organizations (⅓ of the country's hospitals) and tapped Martin VanTrieste, former head of biotech giant Amgen, to serve as pro-bono CEO. The drugs will be sold to nonmember hospitals as well, at slightly higher prices, Liljenquist said.