• By Duska Anastasijevic

Mayo Clinic joins hospitals to launch a not-for-profit generic drug company

September 6, 2018

prescription pills and medicine on table with stethoscopeROCHESTER, Minn.  Mayo Clinic joins a coalition of seven hospitals in launching Civica Rx, a not-for-profit generic drug company that will help patients by addressing shortages and high prices of lifesaving medications. The company, which is organized as a Delaware nonstock, not-for-profit corporation, will be headquartered in Utah.

Other initial governing members of Civica Rx are Catholic Health Initiatives, Hospital Corporation of America (HCA), Intermountain Healthcare, Mayo Clinic, Providence St. Joseph Health, SSM Health, and Trinity Health. These seven organizations, representing about 500 U.S. hospitals, will provide leadership for the Civica Rx board of directors and much of the initial capitalization for the company. The Department of Veterans Affairs also will work in consultation with Civica Rx to address its needs. Other health systems participating with Civica Rx will be announced later this year.

Three major philanthropies will also join Civica Rx as governing members: the Laura and John Arnold Foundation, the Peterson Center on Healthcare, and the Gary and Mary West Foundation. The engagement of philanthropic members is intended to further support and safeguard the company’s not-for-profit, social welfare mission.

Civica Rx, a manufacturer approved by the Food and Drug Administration, will directly manufacture generic drugs or subcontract manufacturing to reputable contract manufacturing organizations. Civica Rx has identified 14 hospital-administered generic drugs as the initial focus of its efforts. Civica Rx expects to have its first products on the market as early as 2019. The company also will provide generic medications to the retail market, offering an affordable alternative to products from incumbent generic drug companies.

Civica Rx first will seek to stabilize the supply of essential generic medications administered in hospitals  many of which have fallen into chronic shortage situations. These shortages put patients at risk. The initiative also aims to lower the costs and enable more predictable supplies of essential generic medicines, helping ensure that patient needs come first.

“This endeavor demonstrates the need for collaboration to solve the most complex health care challenges of today. I am pleased to see our collective commitment to improving the health and well-being of millions of patients come alive through this mission-driven initiative,” says John Noseworthy, M.D., president and CEO, Mayo Clinic.

Martin VanTrieste, former chief quality officer for Amgen Inc., one of the world’s largest biotechnology companies, has been named the Civica Rx CEO. He has more than 35 years of experience in pharmaceuticals and was ranked No. 2 on The Medicine Maker's 2018 Power List of Industry Influencers. VanTrieste has agreed to lead Civica Rx without compensation.

“We are creating a public asset whose mission is to ensure that essential generic medications are accessible and affordable,” says VanTrieste. “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.”

Research into the actual costs of manufacturing and distributing generic drugs suggests that, in many instances, generic drug prices used in hospitals can be reduced to a fraction of their current costs, saving patients  and the health care systems that care for them  hundreds of millions of dollars each year.

Since the initiative was announced in early 2018, more than 120 health organizations representing about one-third of the nation’s hospitals have contacted Civica Rx and expressed a commitment or interest in participating with the new company. Civica Rx is collaborating with the American Hospital Association’s newly formed Center for Health Innovation to address inquiries about the initiative.

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About Catholic Health Initiatives
Catholic Health Initiatives, a faith-based health system formed in 1996, is one of the nation’s largest nonprofit health systems. Based in Englewood, Colo, CHI operates in 18 states and comprises 100 hospitals, including two academic health centers, major teaching hospitals and 29 critical-access facilities, representing approximately 1,230 sites of care. In fiscal year 2017, CHI provided $2.1 billion in charity care and community benefit, with operating revenues of $15.5 billion.

About HCA Healthcare
HCA Healthcare is a leading provider of healthcare, consisting of 178 hospitals and approximately 1,800 care sites in 20 states and the U.K. With its founding in 1968, HCA Healthcare created a new model for hospital care, using combined resources to strengthen hospitals, deliver patient-focused care and improve the practice of medicine. HCA Healthcare is a learning health care system, using more than 28 million annual patient encounters to advance science, improve care and save lives.

About Intermountain Healthcare
Intermountain Healthcare is a Utah-based, not-for-profit system of 23 hospitals, 170 clinics, a Medical Group with about 2,300 employed physicians and advanced practice clinicians, a health plans group called SelectHealth, and other medical services. Intermountain is widely recognized as a leader in transforming health care through high-quality and sustainable costs.

About Providence St. Joseph Health
Providence St. Joseph Health is committed to improving the health of the communities it serves, especially those who are poor and vulnerable. With 51 hospitals, 829 physician clinics, senior services, supportive housing, and many other health and educational services, the health system and its partners employ 119,000 caregivers (employees) serving communities across seven states—Alaska, California, Montana, New Mexico, Oregon, Texas and Washington. For more information about PSJH, visit. www.psjhealth.org.

About SSM Health
SSM Health is a Catholic, not-for-profit health system serving the comprehensive health needs of communities across the Midwest through a robust and fully integrated health care delivery system. With more than 40,000 employees and 10,000 providers, SSM Health includes 24 hospitals, more than 300 physician offices and other outpatient care sites, 10 post-acute facilities, comprehensive home care and hospice services, a pharmacy benefit company, a health insurance company, an accountable care organization, and virtual care.

About Trinity Health
Trinity Health is one of the largest Catholic health systems in the nation, serving communities through 94 hospitals and 109 continuing care locations in 22 states by the efforts of 133,000 colleagues and 7,800 employed physicians and clinicians. Based in Livonia, Mich., and with annual operating revenues of $17.6 billion and assets of $24.7 billion, the organization returns $1.1 billion to its communities annually in the form of charity care and other community benefit programs.

About Mayo Clinic
Mayo Clinic is a nonprofit organization committed to clinical practice, education and research, providing expert, comprehensive care to everyone who needs healing. Learn more about Mayo Clinic. Visit the Mayo Clinic News Network.

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