Advantages of Civica Rx

Civica Rx was established in 2018 to address a persistent drug shortage problem that has become a national crisis for hospitals and patients. Civica, a mission-driven, not-for-profit, non-stock generic drug company, was founded by leading hospital systems that know first-hand about the impact of the inconsistent, unpredictable, and often unstable market dynamics that lead to drug shortages.

Civica’s business model is designed to ensure essential generic medicines are consistently accessible and affordable within a robust and reliable supply chain. As a nonprofit organization without shareholders, no member of Civica will have an equity interest in the company and the governance structure makes it virtually impossible to sell or change Civica’s nonprofit mission.

Hospital systems and philanthropy partners determine the drugs that Civica will manufacture based largely on the most urgent need. The process for drug selection goes through a newly created Civica Drug Selection Advisory Committee and is approved by Civica’s governing board. Civica will only prioritize medications that make a difference to patients.

The Civica approach is to provide transparent pricing for all of the drugs it manufactures.  Civica’s pricing is cost-plus pricing and factors in the cost of goods sold, administrative costs and an allocation of Research & Development costs for the manufacture of future Civica products. The company does not require or pay fees or rebates. Each of these elements will be transparent so that our health systems understand the true cost of making a drug. As a not-for-profit, Civica’s financial price model focuses on providing the most sustainable appropriate cost for health systems and does not focus on providing equity or additional monetization.

All partnering health systems will have visibility into actual manufacturing costs. This transparency will prevent cyclical price increases from happening in the market as our health systems understand and align on which drug prices are sustainable into the future and which are not. This, in conjunction with the single price for all, creates a sustainable long-term pricing model that will prevent price manipulation for Civica medicines.

Civica does not enter into exclusive contracts with members or suppliers. Civica is pro-competitive as we realize restrictive and exclusive contracts are a significant reason for drug shortages.

Commitment to volume, both on the hospital side and the manufacturer side, allows Civica to purchase the right volume amounts for hospital systems and enables manufacturers to commit their production capacity based on long-term projected volumes. This can eliminate much of the safeguard expense that may be built into short-term contracts.

The commitment to redundant capacity, building six months of safety stock inventory coupled with establishing long-term contracts, allows Civica to work with Active Pharmaceutical Ingredient (API) suppliers and manufacturers to bring up new capacity that does not exist in the market now. Because there is a long-term commitment to the product, suppliers who have typically not entered specific API markets or drug markets are engaging because they see the long-term value.

Civica’s leadership is composed of seasoned pharmaceutical industry experts across all functional areas. These individuals have spent most of their careers directly leading drug development, manufacturing, quality/regulatory compliance, and all aspects of pharmaceutical operations necessary in assuring the availability, quality and affordability of generic (and branded) drugs.  The team’s experience also includes a keen familiarity with both API and finished drug suppliers across the globe, as well as experience in assuring such suppliers meet all industry standards and regulatory expectations to ensure the consistent supply of safe, effective and compliant products to the market.

Civica will own the right to manufacture the products that are prioritized to address recurring drug shortages. This will occur through many different mediums – contractual partnerships, joint ventures, and R&D to apply for the Abbreviated New Drug Applications (ANDA). The result is the ability to commit to long-term quality volumes for the products that our hospitals have prioritized.

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