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Intermountain and six hospitals officially launch not-for-profit generic drug company, Civica Rx

New CEO Martin VanTrieste will receive no pay and the startup will initially focus on 14 drugs.

Susan Morse, Senior Editor

Intermountain Healthcare and six other hospital systems have formally launched the not-for-profit generic drug company and its new chief executive officer. 

CEO Martin VanTrieste, former chief quality officer for the pharmaceutical company Amgen, has agreed to lead Civica Rx without compensation, according to a statement from the organizations.

First announced in January as Project Rx, the name of the not-for-profit generic prescription drug manufacturer is now Civica Rx. 

It was formed to address drugs shortages and the high price of lifesaving medications. Research into the cost of manufacturing and distributing generic drugs suggests that prices for drugs used in hospitals can be reduced to a fraction of their current costs, saving both the healthcare systems and patients hundreds of millions of dollars each year, the organizations said.

However, a Health Affairs report released earlier this year cautioned that the company would face higher-than-average costs as well as  significant regulatory and manufacturing hurdles.

Civica Rx said it expects to have its first products on the market as early as 2019. It will be an FDA approved manufacturer and will either directly manufacture generic drugs or sub-contract manufacturing to contract manufacturing organizations.  

Civica Rx has identified 14 hospital-administered generic drugs for its initial focus, to stabilize the supply of medications, many of which have fallen into chronic shortages. 

Headquartered in Utah, Civica Rx includes Catholic Health Initiatives, HCA Healthcare, Intermountain Healthcare, Mayo Clinic, Providence St. Joseph Health, SSM Health, and Trinity Health. The seven organizations represent about 500 hospitals. Eech will provide much of the initial capitalization for the company. 

In addition, more than 120 other health organizations have contacted Civica Rx and expressed a commitment or interest in participating with the new not-for-profit corporation. Other health systems participating with Civica Rx are expected to be announced later this year.

The U.S. Department of Veterans Affairs will also work in consultation with Civica Rx to address its particular needs. 

"We are creating a public asset with a mission to ensure that essential generic medications are accessible and affordable,"  VanTrieste said by statement. "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."

Civica Rx is collaborating with the American Hospital Association's newly formed AHA Center for Health Innovation to address inquiries about the initiative. The contact number is 800-242-4677.

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

Twitter: @SusanJMorse
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