Skip to main content

Analysis

Hospitals Launch Not-for-Profit Civica Rx in 'Direct Challenge to Generic Drug Companies'

By John Commins  
   September 06, 2018

The project has identified 14 hospital-administered generic drugs as its initial focus to stabilize the chronically short supply and lower costs, and could release its first products in 2019.

A consortium of health systems and foundations that earlier this year announced plans to create a not-for-profit generic drug company has given the enterprise a name and a leader.

The company will be called Civica Rx, and it will be led by CEO Martin VanTrieste, a former chief quality officer at Amgen, who will serve without compensation, according to a media release from the consortium.

"The generic drug marketplace is broken and, in response, we have created a unique and innovative fix—a public utility that is governed, exclusively, for the good of the people it serves," said Richard J. Gilfillan, MD, CEO of Livonia, Michigan-based Trinity Health, one of seven health systems invested in the project.

"Civica Rx will not earn profits for its investors, but will, instead, ensure that patients receive the greatest benefit—access to the drugs they need at affordable price points," Gilfillan said. 

Civica Rx has identified 14 hospital-administered generic drugs as its initial focus, seeking to stabilize the supply of essential medications, many of which face chronic shortages. The company expects to release its first products as early as 2019.

Civica Rx is organized as a Delaware non-stock, not-for-profit corporation, and will be based in Utah.

"The formation of Civica Rx is a direct challenge to generic drug companies who have sharply and unfairly raised prices on many off-patent drugs over the last several years," said Shelley Lyford, President and CEO of the Gary and Mary West Foundation, one of three national foundations that have each committed $10 million to the project.

"We all pay a price, and lower-income patients shoulder a particularly heavy burden," Lyford said. "This intolerable situation has escalated to a public health crisis. It’s time to put patients before profits and begin the transformation of healthcare that Americans deserve. We’re confident Civica Rx provides a critical initial step with incredible potential."

With Trinity Health, the governing members of Civica Rx represent nearly 500 hospitals nationwide, and will include: Catholic Health Initiatives, HCA Healthcare, Intermountain Healthcare, Mayo Clinic, Providence St. Joseph Health, and SSM Health.

The other foundations investing $10 million each in the project are The Laura and John Arnold Foundation, the Peterson Center on Healthcare.

The Department of Veterans Affairs will consult with Civica Rx, and more health systems are expected to join the consortium later this year.   

John Commins is a content specialist and online news editor for HealthLeaders, a Simplify Compliance brand.


KEY TAKEAWAYS

Three foundations commit $30 million to fund the project.

Stakeholders vow to improve drug supplies and lower costs.

Nearly 500 hospitals represented in the consortium, and more are expected to join.


Get the latest on healthcare leadership in your inbox.