Fed-up Facilities Start New Drug Company

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  • September 6, 2018
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Fed-up Facilities Start New Drug Company

Medical coders and billers will see a new name in their drug claims soon thanks to the effort of three health foundations and seven groups of facilities seeking to end generic drug shortages and lower cost.

Facilities Assuring Supply

Called Civica Rx, the new, nonprofit drug company will start with 14 widely used hospital drugs in short supply. These include intravenous, oral, patch, and injectable drugs such as folic acid and lidocaine. According to Dan Liljenquist, chief strategy officer at Intermountain Healthcare, facilities have been hard hit by shortages caused by manufacturers’ consolidating, stopping production of low-profit medicines, and manufacturing issues.  Facilities pay inflated prices to keep these drugs in stock.
Liljenquist told the Associated Press that in addition to creating a reliable supply for 500 member  hospitals, Civica Rx hopes to reduce drug prices by about 20 percent. Last year, the Justice Department, along with 45 states, accused a group of generic drug makers of price fixing, according to National Public Radio (NPR).
Civica Rx will require facilities to commit to long-term contracts to buy medications at fixed prices. Liljenquist told NPR the long-term stability will be more attractive than the short-term temptation of getting deal.

Big Name Facilities

The company’s board will include governing members that include Intermoutain, the Mayo Clinic, HCA Healthcare, and others. Some drugs will be based in Salt Lake City, Utah but beginning in 2019, Civica Rx will start out by contracting with existing manufactureres to  make medications under its label.
About 120 healthcare companies representing about a third of U.S. hospitals have contacted the organizers of Civica RX to ask about getting in on the deal.

Brad Ericson
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Brad Ericson, MPC, CPC, COSC, is a seasoned healthcare writer and editor. He directed publishing at AAPC for nearly 12 years and worked at Ingenix for 13 years and Aetna Health Plans prior to that. He has been writing and publishing about healthcare since 1979. He received his Bachelor's in Journalism from Idaho State University and his Master's of Professional Communication degree from Westminster College of Salt Lake City.

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