Giving Compass' Take:
- This article describes a partnership between philanthropic organizations and a drugmaker that successfully lowered the cost of 75 medications that are at risk of shortages in the U.S. healthcare system.
- How can donors support affordable and accessible healthcare?
- Learn more about how partnerships and collaborations can improve healthcare access.
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According to an empirical study published in the journal NEJM Catalyst, Civica Rx – a not-for-profit drug manufacturer co-founded by SSM Health and several other leading health systems and philanthropists – is breaking through with positive impact on drug shortages and more affordable prices in the hospital-use generic drugs market.
As shown in the study, Civica Rx significantly increased supply security and lowered the cost in aggregate for 20 drug products that it provided between 2020-2022. These medications are both critical to patient care and have historically been prone to shortages not adequately addressed by the traditional drug supply chain.
Unlike other drugmakers, Civica Rx was created as a “health care utility” – a model in which otherwise competing entities, such as health systems, disruptively collaborate in a mission-oriented way to provide an essential good or service they and their patients all need, at the lowest sustainable cost. SSM Health, along with seven other health systems and three philanthropies, founded Civica Rx in 2018 with a goal of improving medication access rather than profits.
Today, Civica Rx provides more than 75 critical medications that are most at risk for shortages to more than 55 U.S. health systems.
Compared with the cost and supply available from 62 non-Civica drug manufacturers, Civica Rx was able to fulfill its contractually guaranteed volume at 96% vs. the wholesalers’ 86% – and offered an additional product access benefit of 43% above the contractual minimum volume. Additionally, this significant drug access benefit was achieved at an aggregated approximate 3% cost savings.
“SSM Health is very proud to be part of this societally beneficial innovation that addresses one of health care’s most daunting challenges. This empirical study provides promising initial evidence that the health care utility model is working,” Dredge said. “And that means millions of patients should get the critical medications they need more reliably and affordably—and that’s worth innovating for.”
Read the full article about philanthropic partnerships and healthcare at BioUtah.