Angered by rising prices and persistent shortages of generic drugs, seven of the nation’s largest hospital systems have launched a new, not-for-profit manufacturer. The company, which was first discussed publicly earlier this year, starts with a $100 million in capital and loans, some of which will come from three philanthropic organizations, including the Laura and John Arnold Foundation. Civica Rx will contract with other companies to make more than a dozen generics and some sales will start in mid-2019. We spoke with Dan Liljenquist, a vice president at Intermountain Healthcare who initiated the project, about the possibilities and challenges. This is an edited version of our conversation.
Pharmalot: So we spoke in January when you first publicized this idea, but let’s quickly recap. Why are you pursuing this?
Liljenquist: There are real problems in the generic drug market that most Americans don’t know about in the hospital setting. Intermountain, for example, has been managing with a critical shortage of almost 200 drugs. We have a hard time finding drugs, which puts patient care at risk and creates patients stress. And it often comes with very high prices far more than would be justified if the market would function properly.