A welcome new entrant for both patients and payors
The organisation is currently backed by 45+ health systems representing 1,200+ hospitals across the US and its mission is to ensure that essential generic medications are accessible and affordable, with an initial focus on 14 hospital-administered generic drugs.
In May 2019, Civica Rx appointed Xellia Pharmaceuticals (Denmark) to manufacture essential antibiotics including Vancomycin and Daptomycin for Civica’s member health systems. The hope is that members will be able to secure high quality, reliable and acceptable pricing for many of the drugs that often experience supply shortages or are susceptible to price gouging.
The conception of Civica Rx was due in part to the many instances of inflation busting price increases in the generics sector over the years, both by lesser known smaller companies and by large pharma. Most people will recall Turing Pharmaceuticals sensationally increasing the price of one tablet of generic pyrimethamine by 5,000% in 2015. However, Turing Pharmaceuticals is not an isolated case and these large increases have been happening all too frequently.
In 2019, the generic version of Prozac was increased by 568%, while the topical steroid Mometasone, pain reliever and cough medicine Promethazine/Codeine and ADHD treatment Guanfacine all saw triple digit price increases.
Going back further, in November 2014, the US Senate examined the pricing of generic drugs and revealed a number of additional examples. From July 2013 to July 2014, the price of Pravastatin Sodium, (used to treat high cholesterol), increased by 577 percent, the price of Divalproex Sodium (a migraine medication), by 797 percent and the price of Digoxin, a medication used to treat congestive heart failure, by 828 percent respectively. To provide some context, some of these price hike opportunities came about due to the regulators introducing higher standards of manufacturing and regulatory compliance which incidentally took out a portion of manufacturing capacity. The remaining compliant manufacturers saw it as an opportunity to profit from the situation.
Also, there are companies that are speculatively acquiring assets that are not under price regulation, and then increasing prices in a captive market. Although Civica Rx may not be able to get involved in every generic drug that is experiencing a price increase, but it may be able to influence and rein in some speculative or ‘poor market’ behaviour.