Hospital group based in Utah will make own generic drugs, promising to save patients millions

Stock image | Photo by Gumpanat/iStock/Getty Images Plus

ST. GEORGE — Several major hospital groups, including Intermountain Healthcare, recently launched their own nonprofit generic drug company based in Salt Lake City to tackle chronic shortages and high prices of essential medicines.

The new company, Civica Rx, plans to start with 14 widely used hospital drugs that have long been in short supply. The company isn’t disclosing the drugs’ names for competitive reasons, but in a story from The Associated Press, board chairman Dan Liljenquist said they include a mix of generic pills, patches and injectable drugs for treating infections, pain and heart conditions.

This undated photo shows Dan Liljenquist, chairman of the Civica Rx board. This new generic drug company, launched by several major hospital groups on Thursday, Sept. 6, 2018, plans to tackle chronic shortages and high prices of widely used medications | Photo courtesy of Intermountain Healthcare via The Associated Press, St. George News

“The mission of Civica is to make sure these drugs remain in the public domain, that they’re available and affordable to everyone,” Liljenquist said.

Civica Rx’s manufacturing operations will be approved by the Food and Drug Administration. The company will either directly manufacture generic drugs or sub-contract manufacturing to reputable contract manufacturing organizations. Civica Rx expects to get its first medicines on the market by mid- to late-2019.

Drug shortages have been widespread for more than a decade, particularly for inexpensive generic drugs, due to manufacturers consolidating, stopping production of low-profit medicines and having to fix manufacturing problems.

Hospitals are particularly hard hit and frequently must scramble to find scarce medicines, often at huge price markups, or come up with workarounds that may not be as effective or safe for patients.

The company says 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.

Initial governing members of Civica Rx will include Catholic Health Initiatives, HCA Healthcare (Mountainstar in Utah), Intermountain Healthcare, Mayo Clinic, Providence St. Joseph Health, SSM Health and Trinity Health. The U.S. Department of Veterans Affairs will also work in consultation with the company to address its particular needs.

Besides creating a reliable supply for its 500 hospitals, Civica Rx aims to reduce drug prices by about 20 percent. Liljenquist said the drugs will be sold to nonmember hospitals as well, at slightly higher prices.

“We are creating a public asset with a mission to ensure that essential generic medications are accessible and affordable,” Martin VanTrieste, who has been named CEO of the new company, said in a news release issued by Intermountain Healthcare. “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.”

Associated Press medical writer LINDA A. JOHNSON contributed to this report.

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1 Comment

  • Andrew September 9, 2018 at 12:38 pm

    The $1M question is will they be able to produce insulin for diabetics at a lower cost instead of $200-$500/vial?

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