That nonprofit generic firm has a name, $100 M, and a CEO who will work for free
Called Civica Rx, the firm has identified 14 products that it will produce. It will be backed with a total of $100 million from seven healthcare systems and three philanthropies, including the Gary and Mary West Foundation. It will be led by the former chief quality officer for Amgen, Martin VanTrieste, who has agreed to work without compensation.
By Ellie Kincaid and Matthew Herper | Sep 6, 2018 | This article originally appeared in Forbes
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ABOUT THE AUTHOR
Ellie Kincaid is an assistant editor at Forbes covering medicine and healthcare. She’s written for The Wall Street Journal, Consumer Reports, Men’s Journal and Nature Medicine. @ellie_kincaid
ABOUT THE AUTHOR
Matthew Herper has covered science and medicine for Forbes from the Human Genome Project through Vioxx to the blossoming DNA technology changing the world today. @matthewherper
That Nonprofit Generic Firm Has A Name, $100 Million, And A CEO Who Will Work For Free
The not-for-profit generic drug firm that aims to prevent drug shortages and cut prices for patients now has a name—and a boss.
The effort will be called Civica Rx, and it will be run by chief executive Martin VanTrieste, the former chief quality officer for Amgen. VanTrieste, who in a prepared statement called the effort “a public asset,” has agreed to work without compensation.
Civica Rx says it has identified 14 products that it will produce. It will be backed with a total of $100 million from seven healthcare systems and three philanthropies, says Tim Lash, chief strategy officer of West Health and president of the West Health Policy Center, one of the philanthropies. Each will make an upfront payment of $1 million and provide a line of credit for $9 million.
“Essentially what we’re doing is a collective, vertically integrated play into generic manufacturing,” says Dan Liljenquist, SVP and chief strategy officer at Intermountain Healthcare, who will serve as chair of the Civica board. “We don’t think this market should be monetized,” Liljenquist says. He compares dispensing generic drugs to the laundry and food services of a hospital.
The healthcare systems involved: Catholic Health Initiatives, HCA Healthcare, Intermountain Healthcare, Mayo Clinic, Providence St. Joseph Health, SSM Health, and Trinity Health. The philanthropies: the Laura and John Arnold Foundation, the Peterson Center on Healthcare, and the Gary and Mary West Foundation.
Before manufacturing any drugs, Civica will work out contracts with its members for the drugs they will buy, how much, and at what price, Liljenquist says. Each health system will pay the same, transparent price and will commit to buying that drug from Civica, and no single health system will be able to buy up all the supply at once and create a shortage for other members. The nonprofit intends to make everything from sterile injectable to tablets to patches.
“For far too long our country has been held hostage to drug companies that are charging excessive prices,” said Shelley Lyford, president and CEO of West Health and the Gary and Mary West Foundation. “Due to the inaction of elected officials, we have organizations popping up across the U.S. like Civica taking on huge societal problems and being disruptive in the market.”
The governing board of foundations and health systems will make sure the nonprofit will charge below-market prices, and that hospitals won’t be able to buy enough of the drugs to sell them on the open market for a profit. “There is no way for any penny of revenue to be paid to any members of Civica,” says Liljenquist. “We tried to make sure nobody can turn this into the monster we’re trying to solve for.”