Generics have become available in increasingly short supply as manufacturers chase profits on higher-priced medications rather than production on generic versions.
In an effort to counteract the rising prices and shortages of generic drugs, Civica Rx and Xellia Pharmaceuticals have teamed up to produce the antibiotics vancomycin and daptomycin for Civica's members.
Modern Healthcare reports that those antibiotics, used to treat critically ill patients with infections resistant to other antibiotics, are the first on Civica's list of 14 generic medications the partnership plans to produce this year.
Related: Health systems' generic-drug venture gaining steam (and new members)
As the venture kicks off, Civica Rx is working with holders of “abbreviated new drug applications,” or ANDAs. According to Modern Healthcare, these groups have the “manufacturing capability and capacity to produce antibiotics, anesthetics, cardiac medications, pain management medications and other essential sterile injectable medicines used in hospitals daily.” Once the next phase begins, it intends to develop its own ANDAs and finally to buy or build its own manufacturing facilities.
Member hospitals sign up for five- to ten-year contracts to sustain the lower prices Civica negotiates with manufacturers.
Generics have become available in increasingly short supply as manufacturers chase profits on higher-priced medications rather than production on generic versions. Those manufacturers who remain hike prices, confronting consumers with a double whammy of higher prices for generics—and the possibility of not being able to get them no matter the price. The partnership is designed to keep generics flowing at lower prices to Civica's members.
“We've lost balance,” Jeff Rosner, senior director of pharmacy contracting and purchasing at the Cleveland Clinic, told Modern Healthcare in January. “It's a lot more profitable to make a contracted drug for a branded company as opposed to making generic drugs.”
Not being able to find generics when needed not only introduces additional risk into the health equation, through delayed or canceled treatments, but also eats a lot of time as hospitals try to find safe and high-quality alternate sources.
According to Dr. Amy Compton-Phillips, executive vice president and chief clinical officer, Providence St. Joseph Health, a Civica founding member, has already had to cope with shortages of certain dosages of vancomycin and daptomycin. Having to tweak available dosages instead of being able to provide the right one makes treatment riskier. “You are setting things up to fail,” she told Modern Healthcare. “The crisis we have at the moment is affordability. We pushed back against these crazy rates of inflation in drug prices. We just can't do it. We have got to change the discussion so we're just not victims of circumstance. We will do it ourselves.”
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Marlene Satter
Marlene Y. Satter has worked in and written about the financial industry for decades.
