Civica Rx added Anthem to its subsidiary that aims to team up with insurers to lower prescription drug costs, the not-for-profit company announced Wednesday.
Anthem joined Blue Cross and Blue Shield Association and 17 independent Blues companies in the spinoff CivicaScript, which will be led by former OptumRx executive Gina Guinasso. The insurers represent close to 100 million individuals.
Civica Rx is pursuing rights to predominantly manufacture certain sterile injectable generic drugs often used in hospitals while CivicaScript targets common but high-priced generic medicines sold in pharmacies. CivicaScript will initially develop six to 10 generic drugs that have few competitors, which will launch as early as 2022 through retail and mail-order pharmacies.
“It’s an immoral practice to charge people the least affordable, highest price,” Dan Liljenquist, Civica board chairman and chief strategy officer at Intermountain Healthcare, told Modern Healthcare. “We want to pop the price bubble so we could have a market price that is fair and not opaque.”
CivicaScript, for instance, would model what it would cost to manufacture a specific drug on a transparent, cost-plus basis, and participating payers would compare the CivicaScript price with the best post-discount price they receive for that drug. If CivicaScript can manufacture the drug less expensively, it will line up multi-year purchase commitments from payers that would prioritize CivicaScript products and also provide access to the general public. The company hopes to publish the suggested retail price on the bottle.
Those five-year contracts will likely require between 30% and 50% of their total volume for a specific drug. Civica Rx has primarily subcontracted with existing manufacturers to produce generic drugs that have been in short supply, but the company looks to ultimately manufacture their own.
It is currently building a manufacturing facility in Virginia, which will produce sterile injectable medications used in hospitals for COVID-19 patient care, emergency department and intensive-care unit treatments, surgeries and to treat other serious conditions.
The drug manufacturer Catalent, which has facilities in New Jersey and Kentucky, has agreed to a long-term partnership with CivicaScript to produce essential generic medicines and develop a range of CivicaScript-owned generic drug Abbreviated New Drug Applications. Civica is in the process of developing a number Abbreviated New Drug Applications.
“Our experts in Somerset and Winchester have a proven track record of developing and launching new drugs, and with CivicaScript, we are in a position to offer a robust and efficient supply chain that can help increase access to vital medicines,” Alessandro Maselli, president and COO of Catalent, said in prepared remarks.
Drug manufacturers that have monopolies collapse the price to wipe out the investment of new entrants, only to raise the price again after the threat of competition has subsided. They can also significantly increase the price of generic drugs without many repercussions, as was the case for the EpiPen.
Daptomycin, an antibiotic, was going for more than $200 a dose. Civica helped bring the price down to around $25 after it introduced its own version, Liljenquist said.
Civica hopes that its model will make the pharmaceutical supply chain less vulnerable to market manipulation. Civica has an up to six-month safety supply of every drug it produces, which was particularly helpful when COVID-19 hamstrung overseas suppliers, Liljenquist said.
“We will only market drugs where there is a market failure and clear abuse,” he said. “We want to be in a position where we are never at the mercy of a (monopoly) manufacturer again.”