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HCA, hospital groups launch generic drug maker to combat shortages, price hikes

A coalition of major U.S. hospital systems are setting up a new not-for-profit generic drug maker, Civica Rx, in an effort to address medicine shortages and rising drug costs.

Previously known as Project Rx, Civica Rx will be based in Utah and is organized as a Delaware nonstock, not-for-profit corporation. The initiative will initially focus on 14 hospital-administered generic therapies. The company will be a U.S. Food and Drug Administration-approved manufacturer and will either directly manufacture generic drugs or sub-contract them. Civica Rx intends to bring its first products to market as early as 2019.

Since launching in January, the initiative has attracted interest or commitments from more than 120 health organizations representing about a third of the nation's hospitals.

Initial governing members of Civica Rx include Catholic Health Initiatives, HCA Healthcare Inc., Intermountain Health Care Inc., Mayo Clinic Health System Inc., Providence St. Joseph Health, SSM Health Care Corp. and Trinity Health Corp. The organizations, which represent about 500 U.S. hospitals, will each have a seat on Civica Rx's board and will provide much of the initial capitalization for the company. Other health systems expected to participate will be announced later in 2018.

Martin Van Trieste, former chief quality officer of Amgen Inc., will serve as CEO of Civica Rx. The Laura And John Arnold Foundation, The Peterson Center on Healthcare and The Gary and Mary West Foundation will also join Civica Rx as governing members to support the company's not-for-profit, social welfare purpose.