Mayo Clinic collaborates with seven hospitals to establish not-for-profit generic drug company

Mayo Clinic joins a coalition of seven hospitals in launching Civica Rx, a not-for-profit generic drug company that will help patients by addressing shortages and high prices of lifesaving medications. The company, which is organized as a Delaware nonstock, not-for-profit corporation, will be headquartered in Utah.

Other initial governing members of Civica Rx are Catholic Health Initiatives, Hospital Corporation of America (HCA), Intermountain Healthcare, Mayo Clinic, Providence St. Joseph Health, SSM Health, and Trinity Health. These seven organizations, representing about 500 U.S. hospitals, will provide leadership for the Civica Rx board of directors and much of the initial capitalization for the company. The Department of Veterans Affairs also will work in consultation with Civica Rx to address its needs. Other health systems participating with Civica Rx will be announced later this year.

Three major philanthropies will also join Civica Rx as governing members: the Laura and John Arnold Foundation, the Peterson Center on Healthcare, and the Gary and Mary West Foundation. The engagement of philanthropic members is intended to further support and safeguard the company's not-for-profit, social welfare mission.

Civica Rx, a manufacturer approved by the Food and Drug Administration, will directly manufacture generic drugs or subcontract manufacturing to reputable contract manufacturing organizations. Civica Rx has identified 14 hospital-administered generic drugs as the initial focus of its efforts. Civica Rx expects to have its first products on the market as early as 2019. The company also will provide generic medications to the retail market, offering an affordable alternative to products from incumbent generic drug companies.

Civica Rx first will seek to stabilize the supply of essential generic medications administered in hospitals -; many of which have fallen into chronic shortage situations. These shortages put patients at risk. The initiative also aims to lower the costs and enable more predictable supplies of essential generic medicines, helping ensure that patient needs come first.

"This endeavor demonstrates the need for collaboration to solve the most complex health care challenges of today. I am pleased to see our collective commitment to improving the health and well-being of millions of patients come alive through this mission-driven initiative," says John Noseworthy, M.D., president and CEO, Mayo Clinic.

Martin VanTrieste, former chief quality officer for Amgen Inc., one of the world's largest biotechnology companies, has been named the Civica Rx CEO. He has more than 35 years of experience in pharmaceuticals and was ranked No. 2 on The Medicine Maker's 2018 Power List of Industry Influencers. VanTrieste has agreed to lead Civica Rx without compensation.

"We are creating a public asset whose mission is to ensure that essential generic medications are accessible and affordable," says VanTrieste. "The fact that a third of the country's hospitals have either expressed interest or committed to participate with Civica Rx shows a great need for this initiative. This will improve the situation for patients by bringing much-needed competition to the generic drug market."

Research into the actual costs of manufacturing and distributing generic drugs suggests that, in many instances, generic drug prices used in hospitals can be reduced to a fraction of their current costs, saving patients -; and the health care systems that care for them -; hundreds of millions of dollars each year.

Since the initiative was announced in early 2018, more than 120 health organizations representing about one-third of the nation's hospitals have contacted Civica Rx and expressed a commitment or interest in participating with the new company. Civica Rx is collaborating with the American Hospital Association's newly formed Center for Health Innovation to address inquiries about the initiative.​

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