According to an empirical study published today 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. The other original health system partners are CommonSpirit Health (formerly Catholic Health Initiatives), HCA Healthcare, Intermountain Healthcare, Mayo Clinic, Providence St. Joseph Health and Trinity Health. The founding philanthropies are the Gary and Mary West Foundation, Laura and John Arnold Foundation, and Peterson Center on Healthcare.
Today, Civica Rx provides more than 75 critical medications that are most at risk for shortages to more than 55 U.S. health systems.
“Like SSM Health, Civica Rx is driven by a mission of making things better for patients, while also improving and transforming the health care system,” said Carter Dredge, Lead Futurist at SSM Health, a member of the Civica Rx board, and a champion of the health care utility business model. “The results of this study are very encouraging. Drug shortages have been a substantial problem for decades, and this new model appears to be having a differentiated positive impact—representing a new form of structural innovation in healthcare.”
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.”
About SSM Health
SSM Health is a Catholic, not-for-profit health system serving the comprehensive health needs of communities across the Midwest through a robust and fully integrated health care delivery system. The organization’s 40,000 team members and more than 12,800 providers are committed to providing exceptional health care services and revealing God’s healing presence to everyone they serve.
With care delivery sites in Illinois, Missouri, Oklahoma and Wisconsin, SSM Health includes 23 hospitals, more than 300 physician offices and other outpatient and virtual care services, 13 post-acute facilities, comprehensive home care and hospice services, a pharmacy benefit company, a health insurance company and an accountable care organization. It is one of the largest employers in every community it serves. For more information, visit our website or find us on Facebook and Twitter.