Utah Drug Maker Announces First Step On Road To Reducing Generic Drug Prices | KUER 90.1

Utah Drug Maker Announces First Step On Road To Reducing Generic Drug Prices

Oct 2, 2019

A Utah-based drug maker announced today it has taken its first step towards curbing price spikes and shortages of generic drugs in the pharmaceutical industry. 

The nonprofit startup Civica Rx, which launched last year and is based in Lehi, treated its first patient on Sept. 26 with the antibiotic vancomycin, which hospitals use everyday to treat severe infections.

Dan Liljenquist, chief strategy officer for Intermountain Healthcare and Civica’s board chair, said the company began with vancomycin because of how critical it is to everyday hospital care. The drug has been on and off shortage lists for several years, he said. 

The company, which began through a partnership between Intermountain Healthcare and 850 other hospitals, was able to reduce the drug’s price by 50%. Liljenquist said the company expects hospitals and patients to save about $500,000 a year.

That may not sound like a lot in an industry worth $934.8 billion globally, but Liljenquist said it’s a number that will continue to grow as the company works to develop other medications. 

Vancomycin, a powerful, decades-old drug, is one of many generics Civica is aiming to develop with the goal of both stabilizing supplies and reducing unnecessarily high prices of essential medications, a problem which he said drug companies are not doing enough to address.

“It's just really hard to expect the current structure to solve the problems that [the pharmaceutical industry] helped create,” Liljenquist said. “So we just essentially created a new market.”

As a nonprofit organization, no one involved is making money, including the group’s board members and CEO Martin Van Trieste, Liljenquist said. Civica plans to charge hospitals 5% for the drugs they make, which Liljenquist said is enough to cover their costs and fund the development of other drugs. 

While vancomycin is being manufactured by the Danish drug maker Xellia, Liljenquist said Civica eventually plans to develop others internally. The company aims to bring 14 more drugs to market by the end of the year, and an additional 40 in 2020.