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States, hospitals, and insurers support manufacturing arrangements to ensure access to affordable medicines.
Building on the efforts of Civica Rx, a number of organizations and political leaders are mapping strategies for producing drugs and biologics that they believe will be faster, more reliable, and less costly. The stated aims are to prevent or remedy drug shortages quickly, while also expanding patient access to less expensive medicines, primarily sterile injectables. The many challenges in producing drugs to meet quality standards, however, could undermine these undertakings.
The issue has surfaced among Democratic presidential contenders as part of the debate over strategies for cutting drug prices. Sen. Elizabeth Warren (D-Mass) has proposed that Congress empower the federal government to manufacture drugs, an approach she said would lower the price of insulin and HIV treatments, as well as EpiPens and top-selling biotech therapies. And if Congress fails to act, Warren said she would do this administratively as a first initiative after becoming president.
Local governments are eyeing similar activities, as seen in the January announcement of California Governor Gavin Newson’s plan for the state to establish its own generic drug label to gain access to cheaper medicines (1). The state’s strategy is to use its buying power to contract with existing generic-drug manufacturers for low prices on certain products, with a state purchasing list and prices to come. And the state could extend the program to brand products by allowing all drug purchasers in California-public plans, private insurers, self-insured employers-to combine purchasing power to negotiate a lowest price for all.
A move to ensure supplies and reduce costs of cutting-edge gene therapies is the goal of an initiative by a leading research hospital to expand an existing small-scale operation that provides clinical supplies for early-stage gene therapy trials into broader production to handle anticipated growth in studies of gene-based treatments. The Columbus, Ohio-based Nationwide Children’s Hospital’s Abigail Wexner Research Institute (AWRI) aims to establish Andelyn Biosciences as a for-profit operation to support the production and advancement of novel gene therapies for rare diseases. Initially, Nationwide will extend current production from early research to supplies for more advanced clinical studies, and eventually gear up for commercial production of gene therapies (2).
California officials acknowledged in announcing their drug production plan that it was modeling its program on that established by the Civica Rx nonprofit formed in 2018 by a large group of hospitals and healthcare systems to create and produce more affordable generic drugs. The stated aim was to overcome chronic shortages in vital therapies for emergency care and hospital procedures (3). Led by Intermountain Healthcare, HCA Healthcare, Mayo Clinic, and several others, the group obtained funding from major philanthropies and engaged former Amgen Chief Quality Officer Martin VanTrieste as CEO.
Civica began supplying drugs to its hospital members in 2019, based on an initial production contract with the Danish company, Xellia, to provide certain anti-infectives. In July 2019, Civica signed a five-year agreement with Hikma Pharmaceuticals to manufacture and supply 14 sterile injectable medications to the organization, with Civica serving as a private label distributor and using its own drug code. Then in January 2020, Civica announced an agreement with Thermo Fisher Scientific to develop its own medicines for member hospitals, starting with nine drugs used in critical or emergency care that have experienced supply problems (4). By providing a guaranteed market for these contract manufacturers, Civica aims to obtain the agreed-on medicines at lower, set prices. Ultimately Civica hopes to establish its own manufacturing facilities to produce more of its own generic drugs.
Similarly, the hospital service firm Premier Inc.’s Provide Gx program negotiated a contract with Exela Pharma Sciences to produce certain sterile injectables experiencing long-term shortages for hundreds of hospitals in its network. The initiative started in October 2019 by resolving shortages of several drugs, including cysteine hydrochloride injection for parenteral nutrition (5).
Meanwhile, Civica took an important step to expand its customer base by forming a partnership with the Blue Cross Blue Shield Association (BCBS) to create a subsidiary to manufacture generic drugs for health plans serving some 40 million patients. BCBS invested $55 million in the new venture, which aims to start with production by 2022 of 7–10 products lacking competition (6). Analysts expect that insulin will be a main target.
In addition to addressing shortages and affordability of vital medicines, VanTrieste emphasized the larger goal of providing high-quality medicines that are always available at a public meeting on drug quality sponsored by FDA and the Duke Margolis Center for Health Policy in Washington, DC in February 2020. Convened to address stakeholder concerns about drug access and threats to quality from an expanding global supply chain, officials from the Center for Drug Evaluation and Research described efforts to encourage manufacturers to invest in advanced manufacturing and innovative technology to support drug quality systems able to avoid shortages. In lamenting the uncertain quality of drugs made in China and India, VanTrieste said his program would disclose where the drug is made and the origin of active ingredients. Manufacturing costs may be higher for Civica products made in the United States, he acknowledged, but this non-profit organization will maintain low prices. VanTrieste further supported FDA proposals for some kind of quality system score card, which would help companies that excel to expand, and those that fall short to see where to fix problems.
Civica’s strategy of working with established contract manufacturers appears appropriate, given the difficulties hospitals and health agencies often have with in-house production of drugs that meet FDA standards for quality and safety. Several years ago, the National Institutes of Health (NIH) had to shut down a clinical supplies production unit at its main Clinical Center due to contamination and sterility issues identified in FDA inspections. A report on the program issued in 2016 documented the challenges in producing sterile injectables at even such a prominent health center and advised NIH not to rebuild the pharmaceutical production unit, but to tap commercial sources for sterile products (7). The report concluded by noting that manufacturing novel drugs for clinical trial use is “a high-risk process” that requires attention to quality, extensive staff training, and clearly defined standards.
1. M. Gutierrez, “California Eyes Selling its Own Brand of Generic Prescription Drugs to Battle High Costs,” LA Times, Jan. 9, 2020.
2. Nationwide Children’s Hospital, “Nationwide Children’s Hospital Announces Plans for Andelyn Biosciences,” Press Release, Jan. 13, 2020.
3. Civic Rx, “Not-for-profit Generic Drug Company Officially Established, Attracts Interest of More Than 120 Health Organizations,” Press Release, Sept. 6, 2018.
4. Civica Rx, “Civica Rx Partners with Thermo Fisher Scientific to Develop and Manufacture Drugs with a History of Drug Shortages,” Press Release, Jan. 16, 2020.
5. Premiere, “Partnership Between Premier’s ProvideGx Program and Exela Pharma Sciences, LLC, Successfully Resolves National Shortage of Cysteine Hydrochloride,” Press Release, Oct. 8, 2019.
6. BCBS, “Blue Cross and Blue Shield Companies Join Forces with Civica Rx to Lower Costs of Select High-Cost Generic Medications,” Press Release, Jan. 23, 2020.
7. NIH, Reducing Risk and Promoting Patient Safety for NIH Intramural Clinical Research, Final Report, April 2016.
Vol. 33, No. 3
When referring to this article, please cite it as J. Wechsler, "Drug Production Draws Multiple Contenders," BioPharm International 33 (3) 2020.