Hospital-backed Civica Rx nabs Amgen veteran as CEO and targets 14 drugs to knock off

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Civica Rx has support from 120 U.S. hospitals in its effort to fight hospital drug shortages. (shironosov/Getty)

A group of hospitals committed to manufacturing their own drugs to battle shortages and high costs now has a name, more support and a pharma manufacturing veteran to oversee the effort.

First announced in January as Project Rx, today the group said it will be named Civica Rx and that it has support from 120 U.S. hospitals. It has named Martin VanTrieste, former chief quality officer for Amgen as its CEO. VanTrieste, a 35-year pharma vet, signed on to run the operation without pay.

“We are creating a public asset with a mission to ensure that essential generic medications are accessible and affordable,” VanTrieste said in a statement. “The fact that a third of the country’s hospitals have either expressed interest or committed to participate with Civica Rx shows a great need for this initiative. This will improve the situation for patients by bringing much needed competition to the generic drug market.”

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Civica Rx said it will focus initially on 14 hospital-administered generic drugs that are in chronic shortage. Board chairman Dan Liljenquist told ABC News that will include some generic pills and patches as well as injectable drugs for treating infections, pain and heart conditions.

A spokesman said in an email the plan is to use contract manufacturing when possible but if needed, Civica Rx will build manufacturing facilities. The group expects to have its first products available as early as 2019.

Its research, it said, has indicated that it can produce many of those drugs at "a fraction of their current costs," saving patients and healthcare systems hundreds of millions of dollars each year.

Civica Rx will be governed by officials from Catholic Health Initiatives, HCA Healthcare, Intermountain Healthcare, Mayo Clinic, Providence St. Joseph Health, SSM Health, and Trinity Health, which together represent about 500 U.S. hospitals. Three philanthropic organizations, the Laura and John Arnold Foundation, the Peterson Center on Healthcare, and the Gary and Mary West Foundation, also will have members on the board.

The group said the U.S. Department of Veterans Affairs has agreed to consult with Civica Rx to address its particular drug shortage needs.

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For years now, hospitals have had to battle drug shortages and price hikes. A shortage of simple saline solution has created a big headache for health providers while manufacturing issues at a Pfizer Hospira plant has led to shortages of intravenous pain drugs. The supply interruptions sometimes forces hospitals to ration meds or make decisions on which patients get certain drugs.

Experts representing providers said that even when supplies return to normal, they don't experience the price relief they would expect. Drugmakers have responded by explaining that the margins on many drugs have been too thin for too many years and that the cost of upgrading manufacturing plants and supply chains has led to the need for higher prices.