Allan Coukell Opening Testimony before the House Ways and Means Committee, February 6, 2024

Chair Smith question to Allan:

We heard from your statement the difference of the Civica model.

How are your contracting practices different from traditional purchasing and manufacturing organizations?

How can these models be implemented in smaller rural communities?

Mr. Buchanan:

Your thoughts on inventory and management, how do we build manufacturing and jobs in the United States?

Mr. Thompson:

Generic drugs and their appeal for many (and their use) is the (low) price. This discourages manufactures (entering the market) because they can make more money doing anything else. How do we fix that?

Mr. Smith (NE):

Can you reflect on distribution and purchasing and how you can help with rural shortages?

Mr. Schweikert:

There is a revolution happening in pharmaceutical manufacturing.

You’re now manufacturing eight types of generic insulin?

What is your price of insulin?

Would Civica ever consider going into chemotherapy, you would need to have to have a high temp incinerator and disposal systems, is this something Civica would do?

Mr. Blumenauer:

I am curious as what the problems are with a broader application of this model and the allocation of cost.

What are the limitations and long-term applications of this model?

What are the limitations to expansion?

Mr. Davis:

One of the solutions being proposed by stakeholders is a buffer stockpile, where manufacturers or hospitals maintain a six-month supply of product and have incentive to make this happen. What do you think about this proposal to alleviate the problem?

Mr. Ferguson:

I see there being three issues here, regulatory, trade, and market issues.

If you were to look at the regulatory failure, if you were to look at the regulatory environment what changes would you make to impact the manufacturing environment here in the US?

What about the EPA, many times we can’t even produce drugs here due to our own regulations. Is there an impact there?

Ms. Chu:

Drug shortages can be related to high cost. CA launched the CALRx program to sell and produce them at a low cost and recently announce a biosimilar insulin project in the state. How might partnerships with CALRx and Civica help lower prices, alleviate shortages, and increase access?

Ms. Moore WI:

I’m trying to understand drug shortage solutions. We’re having issues with amoxicillin in WI, using this as example can you explain how a database would stop that problem?

Mr. Kildee:

You noted that Civica prioritizes sourcing to the US and that you want to reshore this industry to the US. Communities like mine with a history in manufacturing could play a role. Can you comment on the possibility of drug manufacturing moving back to formerly industrial cities and what you might suggest?

Mr. Moore UT:

Civica was founded just south of my district and is doing work to combat drug shortages.

I want to ask about incentives, do you think Medicare reimbursement mechanisms cause a race to the bottom with regard to pricing?

What can we do or not to negatively impact this market?

Anything to add to ensure we have access to all drugs in rural markets?

Mr. Schmucker:

What are the benefits of long-term contracting and how do we incentivize manufacturers to stay in the market?

Ms. Malliotakis:

What can we do to incentive domestic drug manufacturing?

Gomez:

Your company is partnering with CA to produce low-cost insulin. Can you speak to how this agreement with deal with shortages and the high cost of insulin for patients?

Do you see that investments are sufficient enough to impact the market or is this just the beginning?

Can this agreement serve as a model to bring down costs?