Civica is a non-profit, non-stock bearing company. No member of Civica will have an equity interest. As a non-profit organization without shareholders, the focus of Civica will always be on availability of generic drugs within a robust and reliable supply chain at fair and affordable prices. In addition, the governance structure of Civica makes it virtually impossible to sell or change the non-profit mission.
The hospital systems and philanthropy partners determine the drugs that Civica will manufacture. The process for drug selection goes through the Civica Drug Selection Advisory Committee and is approved by the governing members of the board. Civica will only prioritize medications that make a difference to patients.
The Civica model is to provide transparent pricing in all the drugs manufactured. Civica pricing is cost-plus pricing and factors in the cost of goods sold, SG&A and an allocation of R&D cost for the next Civica product. We do 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 through the Civica model.
Civica health systems will have visibility into actual manufacturing costs. The transparency can prevent cyclical price increases from happening in the market as our health systems understand 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 drugs.
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 systems and the manufacturers can 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 6 months of safety stock inventory coupled with establishing long-term contracts, allows Civica to work with 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.
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 availability, quality, and affordability of generic (and branded) drugs. This 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 consistent ability to provide safe, effective, and compliant products to the market.
This will occur through many different mediums – contractual partnerships, joint ventures, R&D to apply for the ANDA – but the result is the ability to commit to long-term quality volumes for the products that our hospitals have prioritized.