A group of hospitals is teaming up to form a nonprofit that will manufacture generic drugs.
The nonprofit rolled out Thursday, called Civica Rx, is intended to help hospitals curb rising prices and drug shortages, and represents about 500 hospitals.
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The effort is led by Intermountain Healthcare, which is based in Salt Lake City, as well as the Mayo Clinic and HCA Healthcare. Martin Van Trieste, who was chief quality officer for the biotechnologycompany Amgen, will be the company’s chief executive.
“We are creating a public asset with a mission to ensure that essential generic medications are accessible and affordable,” Van Trieste said in the statement. “This will improve the situation for patients by bringing much needed competition to the generic drug market.”
Hospitals have reported that they have had trouble managing their budgets when drug prices spike, and spend a significant amount of resources tracking down drugs that face shortages or substituting them with other drugs. Shortages also can lead to price increases and threaten patient health.
Civica Rx is first focusing on getting an adequate supply of generic medicines that are regularly given to patients and then will focus initially on 14 generic drugs. It plans either to make the drugs itself, which will need approval by the Food and Drug Administration, or to contract them out.
The nonprofit did not indicate which drugs would be included but said the products would be available as early as 2019. The nonprofit also said that it would be transparent about what the costs are and not institute the same complicated, covert rebate scheme most healthcare systems use, involving insurers and pharmacy benefits managers, which serve as drug middlemen.
