Generic

Hospital-backed drug company makes plans to distribute antibiotics

May 17, 2019

A new nonprofit aimed at creating a steady supply of needed drugs to hospitals has laid out its plans for manufacturing and distributing its first round of medicines. 

The nonprofit, Civica Rx, was created to bypass the traditional system of buying hospital drugs, which has led to prices increases and shortages in many cases. This new model allows hospitals to lock into long-term contracts for certain low-cost generic medications. The agreement ensures that the hospitals have a guaranteed lower-cost supply of everyday drugs, while also setting up an investment for the manufacturer who can count on the steady stream of revenue. 

So far, about two dozen hospital systems and 900 hospitals have signed up to buy drugs through Civica. This week, Civica announced the first drugs it will distribute — vancomycin hydrochloride and daptomycin — later this year. All told, Civica says it will be distributing about 14 drugs this year. 

The first two drugs will be made by Copenhagen-based Xellia Pharmaceuticals, which specializes in antibiotics. Civica did not disclose the price its paying for the drugs, but Xellia’s CEO said that Civica is paying a “fair price” for the medications and that the deal will help the company to expand its U.S. operations. 

Read the full Wall Street Journal Report.