The nonprofit generics maker for hospitals plans to enter consumer markets
It’s been two years since a group of health systems banded together to develop their own source of “essential” generic products that had been in short supply. The new entity, Civica Rx, contracted with a number of generics makers to supply generic products, including sterile injectables; the count of such products is now up to 40, with 100 planned to be available by 2023. More recently, it joined with a new generics manufacturer, Phlow Corp., to build its own domestic capacity, and with several insurance companies to provide for patients outside hospital settings. At the same time, there are now 50 health systems as customers of the firm, representing 1,200 hospitals and 30% of hospital beds in the US.
The existence of Civica Rx represents a failure in the US pharma business: Numerous generic products are in short supply, and/or available from only a limited number of providers—sometimes, only one. Production upsets or challenging business conditions can cause shortages, which in turn causes price hikes or, in the worst case, reduced scheduling for surgeries or other hospital-based procedures. By banding together and creating their own source of supply, the founding health systems (aided by a few foundations) have been able to alleviate some shortage conditions. This has also been true during the current pandemic, with Civica Rx providing needed treatments--neuromuscular blocking agents, sedatives, pain relievers, and blood thinners—in the face of surging demand.
“Because the Civica model includes building stockpiles or safety stocks, we have been able to meet demand in hospitals and also provide millions of doses of medicines to the U.S. Strategic National Stockpile,” said Martin VanTrieste, president and CEO of Civica.