The Blue Cross Blue Shield Association and 18 independent and locally-operated BCBS companies are partnering with Civica Rx to lower the cost of generic prescription drugs.
The 18 BCBS companies will provide $55 million to help create a Civica subsidiary, according to the BCBS Association. As a result of the partnership, Civica will produce certain generics taken outside the hospital setting.
The specific generics to be manufactured are still to be determined, but will treat a range of health conditions.
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The effort will focus on generics that currently carry a high price tag as a result of limited or no competition.
The subsidiary will acquire and develop Abbreviated New Drug Applications for select generic drugs and partner with Civica and manufacturing partners to bring more affordable generic drugs to uncompetitive markets in exchange for aggregated volume and multiyear purchasing commitments.
Initially, several generic medications identified as having high potential for savings will be prioritized and will evolve into a platform that can be used to enhance competition for additional generic drugs.
The first generic medications are expected to be available by early 2022.
WHY THIS MATTERS
This partnership is expected to provide hundreds of millions of dollars in savings for consumers and promote competition in the generic drugs market, according to one of the partners, Horizon BCBSNJ.
Actual costs of manufacturing and distributing drugs suggest prices for select high cost generic drugs can be reduced to a fraction of their current costs.
Civica and BCBS companies will hold themselves accountable for passing savings along to consumers by reporting the shared savings annually.
Other health plans, employers, retail partners and healthcare innovators are invited to join the initiative.
THE LARGER TREND
Nonprofit Civica was formed in 2018 by three philanthropies and numerous healthcare organizations, including the Mayo Clinic, Trinity Health and Intermountain Healthcare, to combat drug shortages and price spikes at hospitals. It has grown to include more than 45 health systems that represent over 1,200 hospitals.
To date, Civica has 18 essential medications produced and/or shipped.
In 2018, generics made up 82% of BCBS companies' prescriptions and 22% of BCBS companies' drug spend.
According to BCBS Health of America research, the average cost of a single-source generic prescription has risen by 371% from 2010 to 2017. During the same period, other generics have decreased by an average of 7% per prescription.
BCBS companies currently participating in the Civica partnership include: Blue Cross and Blue Shield of Alabama, Arkansas Blue Cross and Blue Shield, Blue Shield of California, Capital Blue Cross, CareFirst Blue Cross Blue Shield, Excellus Blue Cross Blue Shield, Blue Cross and Blue Shield of Hawaii, Highmark Blue Cross Blue Shield, Horizon Blue Cross Blue Shield of New Jersey, Blue Cross of Idaho, Independence Blue Cross, Blue Cross and Blue Shield of Kansas, Blue Cross and Blue Shield of Kansas City, Blue Cross Blue Shield of Michigan, Blue Cross Blue Shield of Western New York and Blue Shield of Northeastern New York, Blue Cross & Blue Shield of Rhode Island, Blue Cross Blue Shield of South Carolina, Blue Cross and Blue Shield of Vermont and the Blue Cross Blue Shield Association.
ON THE RECORD
"Through this partnership, we will push toward the vital objective of providing greater access to much-needed medications," said Scott P. Serota, president and CEO of BCBSA.
"Civica's mission is to make quality medicines available and affordable to everyone," said Martin VanTrieste, Civica president and CEO. "Numerous studies confirm that medication costs can dictate whether individuals fill or ration their generic prescriptions."
"Prescription drug spending is the single biggest driver of the higher health costs facing consumers and businesses and we cannot and will not simply wait for others to solve this problem," said Kevin P. Conlin, CEO and Chairman of Horizon BCBSNJ.
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