Houston foundation among those to commit $30M to new generic drug company Civica Rx
Houston's Laura and John Arnold Foundation among foundations
HOUSTON – Three national foundations, including one out of Houston, have committed $30 million to help establish a new not-for-profit generic drug company.
According to the press release, the generic drug company was created in an effort to address the risks posed to patients from shortages and rising prices of life-saving generic medications.
Houston's Laura and John Arnold Foundation, the Peterson Center on Healthcare and the Gary and Mary West Foundation each committed $10 million, officials said.
"The chronic shortage of critical drugs compounded with skyrocketing prices is a double blow to our most disadvantaged populations," said Kelli Rhee, president and chief executive officer of the Laura and John Arnold Foundation. "As we continue to pursue more comprehensive solutions, this initiative will disrupt the current market dynamic and provide short-term relief."
The foundations join seven large U.S. hospital systems as governing members of Civica Rx. Officials said the formation of Civica Rx was announced earlier Friday.
Civica Rx has identified 14 hospital-administered generic drugs as its initial focus, seeking to stabilize the supply of essential medications, many of which have fallen into chronic shortage situations, officials said.
"Ensuring that patients can access and afford life-saving medications is critical to our mission to improve health care quality and lower costs," said Jay Want, executive director of the Peterson Center on Healthcare. "Civica Rx represents a truly groundbreaking, market-based approach to help ensure patients get the care they need at prices they can afford."
Officials said each of the philanthropic members is making an initial $1 million contribution to Civica Rx and a commitment of $9 million in loans to be used by the company in the future as necessary.
Funds from the foundations will be used to further their charitable purposes by funding programs and initiatives that will provide high-need populations with timely access to essential generic drugs at affordable prices, officials said.
"The formation of Civica Rx is a direct challenge to generic drug companies who have sharply and unfairly raised prices on many off-patent drugs over the last several years," said Shelley Lyford, president and chief executive officer of the Gary and Mary West Foundation. "We all pay a price, and lower-income patients shoulder a particularly heavy burden. This intolerable situation has escalated to a public health crisis. It's time to put patients before profits and begin the transformation of health care that Americans deserve. We're confident Civica Rx provides a critical initial step with incredible potential."
Officials said the company expects to release its first products as early as 2019.
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