The venture, announced byIntermountain in January, said it plans to have its first productsready by as early as next year. (Photo: Getty)

A drugmaking venture backed by major U.S.hospitals has picked a chief executive officer, hastening thearrival of another threat to generic pharmaceutical manufacturers.

Martin VanTrieste, 58 and a former top executive atbiotechnology giant Amgen Inc., will run the organization, anot-for-profit called Civica Rx. Dan Liljenquist, 44 and anIntermountain Healthcare executive, will be chairman. Healthsystems with a total of about 500 hospitals — includingIntermountain, HCA Healthcare Inc., Mayo Clinic and Catholic HealthInitiatives — will help govern the venture, alongside severalphilanthropies.

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Civica Rx will work to combat drug shortages and skyrocketing prices for some treatments givenin hospitals by manufacturing generics or contracting with otherfirms to make them. Generic drugmakers have faced scrutiny forraising the prices of certain older drugs, particularly whenhospitals lack alternatives. The supply chain for such treatmentshas also been vulnerable to disruptions, leading to persistentshortages.

“Civica Rx will first seek to stabilize the supply of essentialgeneric medications administered in hospitals,” the group said in astatement. “The initiative will also result in lower costs and morepredictable supplies of essential generic medicines.”

The venture, announced by Intermountain in January, said itplans to have its first products ready by as early as next year.It's focused on a group of 14 drugs given in hospitals, but aspokesman for the group declined to identify them. Liljenquist saidthat the drugs are in categories such as pain relief,antipsychotics, antibiotics and cardiovascular treatments,including drugs that are stocked on so-called crash carts used inemergencies.

The number of drug shortages has ticked up recently, accordingto data compiled by the University of Utah Drug InformationService. About 224 drugs were experiencing shortages at the end ofthe second quarter, up from 174 a year earlier. Several injectableopioids used to treat pain have been in short supply; a number ofthose are made by Pfizer Inc.

More Competition The launch of Civica Rx could pose a challengeto companies such as Endo International Plc, which makes injectablemedications given in hospitals. Other big generics makers includeTeva Pharmaceutical Industries Ltd. and Mylan NV.

“We expect a competitive response,” Liljenquist said. “We'regoing to be entering markets that are not particularly competitiveat the moment.”

The U.S. Food and Drug Administration has been working to getmore generic drugs to market to help lower prices. FDA CommissionerScott Gottlieb has said a lack of competition is a key reason forhigh drug costs.

VanTrieste, who has agreed to run the venture without pay,previously worked at drugmakers including Abbott Laboratories andBayer AG, according to his LinkedIn profile. At Amgen, his mostrecent industry post, he was chief quality officer. Civica Rx needsabout $200 million in funding to get started, and the current groupof governing hospitals has contributed more than half that amount,Liljenquist said. The three foundations involved in the effort areeach contributing $10 million, according to a separate statement.They are the Laura and John Arnold Foundation, the Peterson Centeron Healthcare and the Gary and Mary West Foundation.

Other hospitals will contribute funds when they join, based onhow many beds they have. The member hospitals will also commit topurchasing drugs from the venture.

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