Hospitals Launch Their Own Generic Drug Company

Responding to ongoing drug shortages and high drug prices, several major hospital groups in the U.S. have partnered to form Civica Rx, a new group that will manufacture generic drugs.

Civica Rx will produce 14 hospital-administered generic drugs – as yet unnamed – that often are in short supply. When shortages of drugs occur, hospitals may be forced to purchase drugs at price markups or prescribe alternative treatments, potentially increasing the risk to patients.

The company hopes to remedy these problems by creating a reliable supply of generic drugs for its 500 hospital members. By entering the market, Civica Rx also intends to introduce more competition for drugs whose prices remain high. “The mission of Civica is to make sure these drugs remain in the public domain, that they’re available and affordable to everyone,” said Civica Rx board chairperson Dan Liljenquist.

Civica Rx, which was formed by three health foundations and seven hospital groups, plans to sell its generic drugs to nonmember hospitals as well. The company plans to get its first products to the market by 2019.

Sources: The Associated Press, September 6, 2018; Civica Rx press release, September 6, 2018.