Civica Rx to Tackle Antibiotic Drug Shortage with New Partnership

May 16, 2019 - A new partnership between Civica Rx and Xellia Pharmaceuticals in Denmark is aiming to alleviate antibiotic drug shortages, according to a recent announcement from the non-profit drug company.

The companies recently signed a product supply agreement under which Xellia will manufacture antibiotics, including Vancomycin and Daptomycin, for Civica Rx’s member health systems. Health systems belonging to Civica’s membership base include Catholic Health Initiatives, Intermountain Healthcare, the Mayo Clinic, and Advocate Aurora Health.

“We thank Xellia for helping to lead the way in efforts to reduce chronic generic drug shortages in the US, including treatments for serious infections caused by bacteria that are resistant to other antibiotics,” Martin VanTrieste, president and CEO of Civica, states in the announcement. “By helping to stabilize the supply of Vancomycin and Daptomycin, we will have a direct impact on patient safety and public health by providing consistent access to antibiotics that are important treatment options in the management of difficult-to-treat and life-threatening infections.”

Twelve hospitals and health systems formed Civica Rx in 2018 to tackle two key supply chain management issues impacting care delivery: drug shortages and rising prescription drug rates. Since then, approximately 750 US hospitals have joined the non-profit generic drug company to provide an affordable, steady supply of generic medications to hospitals and providers.

A recent study by the National Opinion Research Center (NORC) at the University of Chicago, approximately 80 percent of hospitals found it challenging to obtain common drugs, like opioid injectables for pain management, saline for intravenous therapy, rehydrating patients, and wound cleaning and irrigation, and sodium bicarbonate, which is used as an alkalinizing agent for oral or parenteral therapy.

“If we're operating a hospital and we can't acquire certain critical drugs, we can't provide services to the community,” Craig Frost, System VP of Pharmacy Operations at Catholic Health Initiatives, recently told RevCycleIntelligence.com. “It could really stop a hospital from being able to provide the basic healthcare functions that we're here to do.”

Frost explained that how drugs are manufactured is the biggest supply chain problem for hospitals facing drug shortages.

“We've had a lot of problems with acquiring these medications and the way that the manufacturing marketplace works today,” he said. “Oftentimes there is a sole supplier of a particular drug and that creates shortages or monopolistic pricing of those drugs. Drugs that were relatively inexpensive in the past are all of a sudden budget-busters going forward.”

Civica Rx is offering an alternative. The hospital-led company is looking to manufacturer its own generic drugs and supply the medications to member hospitals at a low price.

“This company is not going to behave like a traditional pharma company in terms of having deals with wholesalers, pharmacy benefit managers, group purchasing organizations, and so on,” Frost explained. “All of those arrangements are rebate-driven. And those rebates are often very opaque. That can drive the price up or even in some cases create shortages.”

“Civica Rx is not going to be in that space. We have a price, and all members get the same price. It doesn't matter if you are a very small rural hospital with just a few beds or you're HCA, that's the largest hospital organization in the country. We will all get the same price for those drugs.”

Anti-infective drugs will be the company’s first production, the recent announcement stated. Abbreviated New Drug Application (ANDA) and Civica labeling and New Drug Code (NDC).

Civica Rx hopes the partnership with Xellia will prevent and avoid drug shortages and give the company and its member the supply security they want.

The company also pledged to partner with suppliers to deliver 14 essential generic medications to members by the end of the year.