Advocate Aurora Health is among a dozen heath care systems to join a new not-for-profit generic drug company venture aimed at giving hospital operators more control over their drug supply.
The Salt Lake City-based drug company Civica Rx announced this week that Advocate Aurora is one of its new founding members.
Civica Rx was established in September 2018 as an effort to combat rising drug prices and stabilize the supply of medications used in hospitals. It initially launched with the backing of seven health systems and three philanthropic foundations.
Now, Civica Rx’s members represent about 750 hospitals throughout the country.
Downers Grove, Illinois- and Milwaukee-based Advocate Aurora Health operates 27 hospitals in Illinois and Wisconsin. UnityPoint Health, an Iowa-based health care system that operates Meriter Hospital in Madison, is also among the venture’s new members.
Financial terms of the membership were not disclosed.
"Drug shortages have become a national crisis where patient treatments and surgeries are canceled, delayed or suboptimal," said Martin VanTrieste, chief executive officer of Civica Rx. “We thank these organizations for joining us to make essential generic medicines accessible and affordable in hospitals across the country.”
Under Civica Rx’s business model, health systems and philanthropy partners determine the drugs that it manufactures based largely on the most urgent need. Civica Rx claims the initiative will result in lower costs and more predictable supplies of medicines.
The company expects to bring more than 14 hospital-administered generic drugs to market this year. The company has not disclosed which drugs it will produce.
Civica has said reductions in costs will vary depending on the drug.
“For some drugs, we will see a significant price decrease because of market manipulation,” the company said on its website. “For some drugs, we may need to increase the price to assure we can produce the drug consistently and reliably. However, for most drugs the total hospital drug purchase price will be lower than the current cost of medications."
Civica will have a single market price for each of its products available to its members, regardless of purchasing scale.
"This means that the smallest critical access hospital will have the same price as a 200+ hospital system," the company said. "This price will be transparent so that our health system partners know exactly what they are paying for patient medication."