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Is the Civica Rx Model the Future of Hospital Drug Supply?

Feb 25, 2020 07:00AM ● By MED Magazine

Sanford Health recently received its first shipment of Vancomycin Hydrochloride from Civia Rx, the new nonprofit drug company collaboration of which Sanford became a founding member in 2019.  Civica Rx was created to ensure a predictable supply of medications to member hospitals. 

“There are shortages of certain drugs off and on all the time,” says Josh Crabtree, MD, Senior VP for Clinic Operations at Sanford Health. “When you only have a single source for a certain pharmaceutical, if a hurricane or some other disaster happens in that location, you have a shortage and prices go up.”

Civica Rx provides its members with a steady supply of generic medications they need in exchange for a guarantee that the institution will buy at least 50 percent of their annual medications through them. Civica keeps a six month safety stock of all of its medications. Crabtree says the model may be the future of drug supply management for US hospitals. 

“Civica is a disruptor,” says Crabtree, who sits on Civica’s medical trends advisory board. “This idea is raising a lot of eyebrows. It is making people look at drug supply in a different way.” 

Daptomycin will be the next drug for the 1200+ Civica Rx hospitals, some time in late 2020. Crabtree says the company is exploring the possibility of moving beyond contracting to manufacture some medications itself. Eventually, Civica may apply the model to oral solid medications, too. 

“I believe they are going to find a way to make that happen with certain medications,” says Crabtree.