In January, Intermountain Healthcare came up with the idea that it and other major hospital systems are fed up with drugs shortages and skyrocketing prices. It was also reported that they are planning to manufacture their own generic medicines.

On Thursday, the company reported that as per the plan, the Salt Lake City-based hospital system is teaming with the Mayo Clinic, HCA Healthcare, and four others to form a nonprofit company called Civica Rx. The seven organizations would represent about 500 U.S. hospitals.

The initial focus will be a group of 14 generic drugs that are administered to patients in the hospital. The consortium wouldn’t name which they are but said its first goal is to stabilize the supply of essential generic medicines, and that it expects to have its first products on the market as early as next year. Civica Rx will be a Food and Drug Administration-approved manufacturer and will either directly make the drugs itself, or will contract the workout, the company said.

Civica also named a chief executive: Martin Van Trieste, the former chief quality officer for biotech giant Amgen.

Van Trieste said in the statement, “We are creating a public asset with a mission to ensure that essential generic medications are accessible and affordable. This will improve the situation for patients by bringing much-needed competition to the generic drug market.”

Although the generic drug system is designed to create low-cost versions of branded medicines, lack of competition and other factors have led to continued shortages of certain products or skyrocketing prices.

There are many cases like the case for Daraprim, the decades-old anti-parasitic drug which was acquired by Martin Shkreli, who raised the price by 5,000 percent overnight. Or a number of drugs acquired by Valeant Pharmaceuticals, which then boosted prices. The Cleveland Clinic said two heart drugs alone, acquired by Valeant, cost it more than $5 million a year.

It can be said that hospitals were left without other options due to lack of competition. However, now, they are planning to create their own drugs and medicines.

The four other organizations will be governed by the nonprofit company called as Catholic Health Initiatives, Providence St. Joseph Health, SSM Health, and Trinity Health. The U.S. Department of Veterans Affairs, the company said, “will also work in consultation with Civica Rx to address its particular needs.”

The Laura and John Arnold Foundation who had their prime focus on combating high drug prices and other health costs, along with the Peterson Center on Healthcare and the Gary and Mary West Foundation, also focused on affordable health care, will also govern the new company.

Mia Noles
Mia Noles is a writer at the Ode Magazine. She holds a Bachelor of Arts English Literature Degree from Leeds University. Her specialty is Celebrity News, History, and World News. She is also a life enthusiast who loves traveling the world and taking part in humanitarian courses. You can contact her at mia@odemagazine.com.

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