Mayo Clinic joins group to launch generic drug manufacturer

Post Bulletin
Thursday, September 6, 2018

By Jeff Kiger 

Mayo Clinic is joining a consortium of U.S. health care systems to create a not-for-profit company that would manufacture generic drugs. The group hopes to lower prices and eliminate medicine shortages as a first-of-its-kind “societal asset” organization.

The membership organization, based in Utah, is called Civica Rx. If successful, it could save patients — and their health care providers — hundreds of millions of dollars a year. The vision, first announced in January, is a grand one that one of its architects describes as a “free-market solution to a daily life-and-death” matter.

Dan Liljenquist, senior vice president and chief strategy officer for Salt Lake City-based Intermountain Healthcare, explained that hospitals are seeing shortages of more than 200 popular generic drugs every day. That means hospitals can’t always find the medicines that patients desperately need. Plus, the prices of the drug can vary wildly.

Civica RX’s straightforward goals are to stabilize the supply of generic drugs and lower the prices of medications without the need to create a profit for stockholders or owners.

“When we say we are trying to create a unique societal asset, we mean just that. This company will be operated for the benefit of society at large,” Liljenquist said. “This is as much about social justice as anything. It’s not right what is happening in the marketplace.”

The scope of the project is extensive. The Center for Justice and Democracy at New York Law School reports that 80 percent of all drugs prescribed are generic. And when generic drugs are available, they are chosen 94 percent of the time over more expensive brand-name drugs.

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