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Hospital Group Creates Generic Drug Company to Lower Prices for Consumers


In an effort to take control over parts of the drug-supply chain, a group of major hospitals has started a generic drug company, named Civica Rx, the The Washington Post reports.

Several hospital leaders said shortages and price spikes on old drugs are managed on a near-daily basis. The cost isn’t just the price of a drug, but the clinical and staff time spent tracking the supply, looking for alternatives and changing protocols. For hospital systems that are in multiple states, the shortage problems are often hyperlocal, too — in one state, morphine might be available while fentanyl is in shortage, while in another, the reverse could be true. So the one solution may not even work systemwide.

Founded by seven hospital systems and three philanthropic groups, Civica Rx is a mission-driven, not-for-profit company. The health systems, which include the Mayo Clinic, Providence St. Joseph Health, and HCA Healthcare, represent around 500 hospitals in total.

“We’re trying to do the right thing — create a first-of-its-kind societal asset with one mission: to make sure essential generic medicines are affordable and available to everyone,” said Dan Liljenquist, chair of Civica Rx and chief strategy officer at Intermountain Healthcare in Utah.

Civica Rx will focus on establishing price transparency and supplies for 14 generic drugs that are common in hospitals. The company has not yet specified which drugs will be on the list. In order to be eligible, the drug must have seen a price increase of at least 50 percent between 2014 and 2016.

In the months since the efforts were announced, Civica Rx says that nearly a third of the country’s hospitals have expressed interest. The company’s first drug could hit the market next year.


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