Civica Rx, Xellia partner to manufacture and distribute generic drugs

Civica Rx and Xellia Pharmaceuticals have partnered to manufacture and distribute generic versions of drugs that are in high demand by hospitals but are often in short supply or costly.

The companies' first product launches will be vancomycin hydrochloride and daptomycin, two antibiotics hospitals often use to treat infections caused by bacteria that is resistant to other types of antibiotics.

Civica Rx is a not-for-profit company established last year by three health foundations and several large U.S. hospital systems, including the Mayo Clinic, Intermountain Healthcare and HCA Healthcare.

The company aims to reduce chronic generic drug shortages and high drug costs. Civica's member hospitals pay the cost of drugs purchased and a fee to Civica based on their size.

Xellia is a Denmark-based specialty pharmaceutical company that develops, manufacturers and commercializes anti-infective treatments. It will manufacture Civica's supply of vancomycin hydrochloride and daptomycin.

The deal between the two companies is the first time that Civica has announced the production of generic drugs since the company was launched in 2018. The two antibiotics are the first of at least 14 essential generic medications that Civica expects to produce and distribute this year

WHY THIS MATTERS

Generics are seen as a cost-effective alternative to more expensive brand-name drugs. Civica Rx says its mission is to ensure that generic medications are available and affordable.

Shortages of anti-infective medications such as vancomycin hydrochloride and daptomycin are impacting patient care in hospitals across the United States. Vancomycin has experienced various periods of low supply since 2002, while daptomycin has seen shortages in recent years, according to The Wall Street Journal.

The partnership will help avoid drug shortages and enable the supply security Civica and its member health systems are seeking. Xellia will make medications for Civica under Xellia's Abbreviated New Drug Application (ANDA) and Civica labeling and New Drug Code (NDC), according to a statement released by the two companies.

THE TREND

The partnership strikes at issues that go much deeper than the availability of two antibiotics. Hospitals nationwide are feeling broad-based pain from rising drug costs and shortages of key drugs.

A report released by the American Hospital Association in January concluded that "continued rising drug prices, as well as shortages for many critical medications, are disrupting patient care and straining hospitals' budgets and operations."

In addition, the AMA report found: Total health system drug spending increased on average 18.5 percent from 2015 to 2017, while overall medical inflation during that period was 6.4 percent; and approximately 80 percent of hospitals found it "extremely challenging to obtain drugs in short supply."

ON THE RECORD

"By helping to stabilize the supply of Vancomycin and Daptomycin, we will have a direct impact on patient safety and public health by providing consistent access to antibiotics that are important treatment options in the management of difficult-to-treat and life-threatening infections," said Martin VanTrieste, president and CEO of Civica Rx.

"We are honored to work with Civica, an innovator in addressing generic drug shortages," said Carl-Aake Carlsson, CEO of Xellia Pharmaceuticals. "Our collaboration also supports Xellia's long-term ambition of mitigating anti-infective drug shortages across the U.S."

Mark Klimek is an independent writer and editor with 20 years' experience covering financial issues, healthcare and more.