Hospitals Band Together to Manufacture Essential Generic Drugs

Megan Brooks
September 07, 2018

Tired of the high drug costs and shortages of lifesaving generic drugs, major hospitals and hospital systems in the United States, including the Mayo Clinic, have come together to create Civica Rx, a not-for-profit generic drug company.

"We are creating a public asset with a mission to ensure that essential generic medications are accessible and affordable," Martin VanTrieste, Civica Rx chief executive officer and former chief quality officer for Amgen, said in the release.

A report released in June by the American Medical Association's Council on Science and Public Health called ongoing drug shortages an "urgent public health crisis."

Civica Rx has attracted the attention of more than 120 health organizations representing about a third of US hospitals, who have either expressed interest or committed to participating in the company.

This shows a "great need for this initiative," said VanTrieste, which will "improve the situation for patients by bringing much needed competition to the generic drug market." VanTrieste has agreed to lead Civica Rx without compensation.

Initially, the company will seek to stabilize the supply of 14 essential generic drugs administered in hospitals, many of which have fallen into chronic shortage situations, putting patients at risk. The initiative also aims to lower the costs and enable more predictable supplies of essential generic medicines, helping ensure that patient needs come first.

"This endeavor demonstrates the need for collaboration to solve the most complex health care challenges of today. 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," John Noseworthy, MD, president and chief executive office, Mayo Clinic, said in a news release.

Drugs at a 'Fraction' of Current Costs

Civica Rx will seek approval from the US Food and Drug Administration to make and sell new generics. The company says it will either directly manufacture generic drugs or subcontract manufacturing to reputable contract manufacturing organizations. 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," the company notes.

Initial governing members of Civica Rx, which will be headquartered in Utah, include Catholic Health Initiatives, HCA Healthcare, Intermountain Healthcare, the Mayo Clinic, Providence St. Joseph Health, SSM Health, and Trinity Health.

These seven organizations, representing about 500 US hospitals, will each provide leadership for the board of directors and will provide much of the initial capitalization for the company. The US Department of Veterans Affairs will also work in consultation with Civica Rx to address its particular needs. Other health systems joining Civica Rx will be announced later this year.

Three major philanthropies will also join Civica Rx as governing members: the Laura and John Arnold Foundation, the Peterson Center on Healthcare, and the Gary and Mary West Foundation.

According to Mike Romano, spokesperson for Catholic Health Initiatives, information about the first 14 generic drugs on the docket is not being provided yet. "For competitive reasons we can't signal in advance the drugs that will be produced," he told Medscape Medical News.

Civica Rx is collaborating with the American Hospital Association's (AHA) newly formed AHA Center for Health Innovation to address inquiries about the initiative. Health systems and hospitals may call 800-242-4677 with questions, or visit for information.


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SOURCE: Medscape, September 07, 2018.

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