Delaware's Christiana Care Health System is joining up with a nonprofit group to purchase some of its generic drugs with the goal of reducing cost and stabilizing the supply chain.
Civica Rx was founded last fall by three philanthropies and seven major hospitals. Its governing body includes the Mayo Clinic, Intermountain Healthcare and the Catholic Health Initiative.
Unlike Group Purchasing Organizations (GPO) which use collective bargaining to negotiate drug prices, Civica is seeking to contract directly with drug manufacturers and eventually take ownership of its own Abbreviated New Drug Applications (ANDA), or the manufacturing licenses of generic drugs.
Terri Corbo is Christiana Care’s Vice President of Laboratory and Pharmacy Services. She says as a nonprofit Civica will be able to reduce pharmaceutical spending for its members overall without gouging prices.
"It is an expectation that there is cost reduction possible by Civica entering this space because the pressures are different. None of the founding or governing members have an equity stakehold. It is a nonprofit," said Corbo.
But Corbo adds the main goal is to make generics that are consistently in short supply readily available.
“They’re open and transparent in the fact that there might be the occasional medication where they take it on because we want to stabilize the supply chain and in that particular instance a drug might be more expensive for whatever variety of factors, but overall Civica is confident that we will reduce spend,” she said.
Civica says it intends to start with a menu of 14 generic drugs this year, but those have not yet been named.
Corbo says she is confident Civica’s governing body of “peer health systems” will select a list of medications that reflect Christiana Care’s needs when purchasing generic drugs.
“We’re all facing the same challenges the way the supply channel is today,” she said.
In a press release, Christiana Care referenced the national shortage in saline that resulted from Hurricane Maria in 2017 as a shared challenge among Civica members.
Christiana Care has committed to purchase drugs through Civica and share the volume of drugs it uses with the other Civica members to evaluate need.
Civica says it also intends to eventually open a drug manufacturing facility in the United States.