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Hospital groups launch own company to make generic drugs

September 6, 2018
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This undated photo provided by Intermountain Healthcare in September 2015 shows Dan Liljenquist, chairman of the Civica Rx board. This new generic drug company, launched by several major hospital groups on Thursday, Sept. 6, 2018, plans to tackle chronic shortages and high prices of widely used medications. (Intermountain Healthcare via AP)

TRENTON, N.J. (AP) — Several major hospital groups Thursday launched their own generic drug company to tackle chronic shortages and high prices.

The new company, Civica Rx, plans to start with 14 widely used hospital drugs long in short supply. The company isn’t disclosing the drugs’ names for competitive reasons, but they include a mix of generic pills, patches and injectable drugs for treating infections, pain and heart conditions, board chairman Dan Liljenquist said.

“The mission of Civica is to make sure these drugs remain in the public domain, that they’re available and affordable to everyone,” he said.

Drug shortages have been widespread for more than a decade, particularly for inexpensive generic drugs, due to manufacturers consolidating, stopping production of low-profit medicines and having to fix manufacturing problems.

Hospitals are particularly hard hit and frequently must scramble to find scarce medicines, often at huge price markups, or come up with workarounds that may not be as effective or safe for patients.

Besides creating a reliable supply for its 500 hospitals, Civica aims to reduce drug prices by about 20 percent. The drugs will be sold to nonmember hospitals as well, at slightly higher prices, Liljenquist said.

The company, based in the Salt Lake City area, plans to make some of the generics itself and hire companies to produce others, he said. It is aiming to get its first medicines on the market by mid- to late 2019.

Civica was founded and funded by three health foundations and seven hospital groups, among them Intermountain Healthcare, a 23-hospital system based in Salt Lake City where Liljenquist is chief strategy officer. Veterans Affairs and the American Hospital Association also are participating.

Chief executive of the not-for-profit company will be Martin VanTrieste, the retired head of manufacturing quality at biotech drugmaker Amgen.

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Follow Linda A. Johnson at https://twitter.com/LindaJ_onPharma

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The Associated Press Health & Science Department receives support from the Howard Hughes Medical Institute’s Department of Science Education. The AP is solely responsible for all content.

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