How States Can Join Civica Rx and Blue Cross Blue Shield’s Partnership for an Affordable, Sustainable Supply of Generics
More than 50 major health systems, including hospitals in every state, have joined forces to create Civica Rx, a nonprofit drug manufacturer that produces affordable, sustainable supplies of certain generic medications – a mission made more critical than ever by generic shortages related to the COVID-19 pandemic.
Civica’s approach is designed to prevent shortages and price increases that can arise when for-profit manufacturers decide to forego production of less profitable generics, or to hike generic prices where there is limited competition. Unlike the opaque pricing models characteristic of the drug industry, Civica’s products are made available for a single, upfront transparent price with no fees or rebates.
Sterile injectables, a category of generics susceptible to shortages, were the initial focus of Civica’s production. Vancomycin, an injectable antibiotic, was the first Civica drug to reach hospitals in September 2019. Nineteen other generics are already in production with an additional 20 to be produced this year. Civica currently supplies some medications that help in the treatment of COVID-19, and the nonprofit has been in contact with the US Department of Health and Human Services regarding how it might be responsive to the pandemic.
Civica’s manufacturing model has built-in redundancies to help prevent interruptions in the supply chain should one supply channel become restricted. Their three-pronged approach involves:
- Contracting with manufacturers to produce generics already on the market under the Civica label;
- Developing Abbreviated New Drug Applications to bring new generics to market under contracts with manufacturers; and
- Acquiring or building Civica manufacturing facilities to produce new generics.
Civica also maintains a reserve of three to six months’ supply of drugs for its hospital members to further mitigate any supply disruptions or spikes in demand, such as those seen during the COVID-19 pandemic.
While the original Civica venture focused on drugs provided in the hospital setting, in January 2020, Civica and 18 Blue Cross Blue Shield (BCBS) health plans announced a partnership to expand access to Civica generics to the outpatient setting. This partnership brings Civica Rx more than 40 million BCBS members, guaranteeing a level of demand that will help the nonprofit venture thrive. The scale of the BCBS partnership positions Civica to be a market disruptor, creating downward price pressure on the entire generic market due to greater competition.
While the BCBS companies brought together the funding and patient volume required to launch this new partnership, they have invited other health plans, employers, and retailers to join the initiative.
There are a number of ways that states can engage with Civica. Civica saves hospital systems between 30 to 50 percent in generic drug costs when purchasing all of Civica’s products, and similar savings are expected for Civica drugs purchase in the outpatient setting. The nonprofit has expressed willingness to work with states and the National Academy for State Health Policy (NASHP) in order to help states determine potential savings for state employee health plans interested in purchasing outpatient Civica drugs for their members. The new outpatient venture will have medications available starting in 2021. Civica is also open to exploring other ways of partnering with states. State purchasers, such as state employee health plans that want to learn more, should contact Jennifer Reck at NASHP for additional information.
For more information about Civica Rx, its partnership with Blue Cross Blue Shield plans, and opportunities for states, view the April 2, 2020 webinar: BCBS Plans and Civica Rx Partner to Produce Lower-Cost Generic Drugs – Opportunities for States.
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