CHI is Governing Member of New Nonprofit Generic Drug Company, Civica

Catholic Health Initiatives has joined six other large health systems to establish Civica Rx, a nonprofit generic drug company that will help patients by addressing shortages and high prices of lifesaving medications.

Initial governing members of Civica Rx will include CHI, HCA Healthcare, Intermountain Healthcare, Mayo Clinic, Providence St. Joseph Health, SSM Health, and Trinity Health. These seven organizations, representing about 500 U.S. hospitals, will each provide leadership for the Civica Rx Board of Directors and will provide much of the initial capitalization for the company.  The U.S. Department of Veterans Affairs (VA) will also work in consultation with Civica Rx to address its particular needs. Other health systems participating with Civica Rx will be announced later this year.

“Our principal objective is to ensure that vital drugs are available to our patients at reasonable prices,” said Kevin E. Lofton, CEO of CHI, one of the nation’s largest nonprofit health systems. “The scope and scale of this initiative – with seven large health systems representing more than 500 hospitals around the nation – will help to create a predictable, accessible supply of drugs to our patients and our facilities, saving hundreds of millions of dollars a year.”

Since the initiative was announced in January 2018, more than 120 health organizations representing about a third of the nation’s hospitals have contacted Civica Rx, expressing a commitment or interest in participating with the new company. The company will be headquartered in Utah.

Civica Rx has identified 14 hospital-administered generic drugs as the initial focus of the company’s efforts. It will be an FDA approved manufacturer and will either directly manufacture generic drugs or sub-contract manufacturing to reputable contract manufacturing organizations.

Civica Rx will first seek to stabilize the supply of essential generic medications administered in hospitals, many of which have fallen into chronic shortage situations, putting patients at risk. The initiative will also result in lower costs and more predictable supplies of essential generic medicines, helping ensure that patients and their needs come first in the generic drug marketplace. Civica Rx expects to have its first products on the market as early as 2019.

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.