Sanford Health joins effort to reduce chronic drug shortages

"When the cost for a drug goes up 1,000 percent overnight, we really had to find a better way."

drug shortages

SALT LAKE CITY — Sanford Health has joined 11 other health systems as founding members of new not-for-profit company focused on easing drug shortages that have become all too common and affect all aspects of the health care delivery system.

Three philanthropies and seven leading health systems established Civica Rx in September in an effort to lower costs and create more predictable supplies of many medicines. It will help ensure that patients and their needs come first in the generic drug marketplace.

Civica Rx said the 12 founding health systems represent about 300 hospitals across the United States. When combined with hospitals represented by the initial governing members of Civica Rx, about 800 U.S. hospitals have joined the mission-driven venture so far, with many more health systems expressing interest.

“We are thrilled to welcome these highly-regarded health systems to Civica as founding members,” said Martin VanTrieste, CEO of Civica Rx.  “Drug shortages have become a national crisis where patient treatments and surgeries are canceled, delayed or suboptimal. We thank these organizations for joining us to make essential generic medicines accessible and affordable in hospitals across the country.”

Help patients, lower costs

Jesse Breidenbach, senior director of Sanford Health’s pharmacy, said the organization is joining Civica to try to take back control, lower prices and help patients.

“We work hard to minimize how drug shortages and cost fluctuations affect patients. At some point you have to say, rather than wait for someone to change it, we’ll do it ourselves. We have had success at controlling these factors, but when the cost for a drug goes up 1,000 percent overnight, we really had to find a better way,” he said.

There are two basic targets for Civica: The profiteering that happens when there’s a single source for the generic product and the complete lack of availability of certain medications, Breidenbach said.

Often, current market situations don’t support multiple manufacturers of certain generic medications, he said. In these situations, even when multiple manufacturers may have the ability to produce a critical generic drug, many factors affect their ability or desire to do so.

One factor has been a sustainable price that supports actual costs of manufacturing a product, Breidenbach. What we have seen is that some generic manufacturers are willing to drop prices temporarily and long enough to force other maufacturers out of a market for a certain drug and subsequently raising prices after becoming the sole source for that drug. Limited sources for critical medications and associated cases of profiteering along with production related-issues have created large generic drug sourcing challenges for hospitals over the past five to 10 years.

“The most important premise of Civica is the guaranteed demand of these products at a price that is affordable to the health systems,” Breidenbach said.

Founding systems

The 12 Civica Rx founding members that will drive drug selection decisions to ensure it manufactures the medications that are most essential to patient care include:

  • Advocate Aurora Health
  • Allegheny Health Network
  • Baptist Health South Florida
  • Franciscan Alliance
  • Memorial Hermann Health System
  • NYU Langone
  • Oschner Health System
  • Sanford Health
  • Luke’s University Health Network
  • Spectrum Health
  • Steward Health Care
  • Unitypoint Health

Civica Rx expects to bring more than 14 hospital-administered generic drugs to hospitals and health care systems in 2019 as the initial focus of the company’s efforts, with many additional medications prioritized by the health care systems as the next phase of focus for the company. Civica Rx is working toward becoming an FDA-approved manufacturer and will either directly manufacture generic drugs or subcontract manufacturing to trusted supply partners.

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