Since its inception, CivicaRx has wasted no time making splashes in the U.S. drug market.

Founded in 2018 as a nonprofit, provider-owned generic drug manufacturer by Salt Lake City–based Intermountain Healthcare, Civica rapidly attracted health systems into its model. At this point, those 45-participating systems account for 213,000 inpatient beds (CivicaRx statistics). Strong demand for relief from generic drug shortages made the Civica model immediately viable, with its generics treating patients by late 2019.

Civica’s first payer partnership shows that despite the company’s newness, it is already moving the needle toward reducing generic prescription costs.

Civica, the Blue Cross Blue Shield Association and 18 nonprofit Blue plans will team up on a subsidiary that could lower costs for tens of millions of Blue plan enrollees. While Civica’s initial focus was hospital-based drugs, the Blue-Civica partnership will focus on reducing costs of outpatient drugs. The aim of reducing costs is to increase adherence while cutting abandonment and drug rationing by patients.

The 18 independent Blue plans include Blue Shield of California; state market leaders such as Alabama, Michigan, New Jersey, and South Carolina; two multistate powerhouses (Highmark and CareFirst); regional plans in Pennsylvania (Capital Blue Cross and Independence Blue Cross) and New York (Excellus BCBS and HealthNow); and Blue plans from Rhode Island to Kansas to Idaho.

The 18 Blue plans cover more than 28 million medical lives, of which 17.4 million receive pharmacy benefits from their Blue plans (DRG July 2019 statistics). Those are substantial populations that could be impacted by the Blue-Civica partnership.

The BCBSA has shown new signs of leveraging its clout and market shares. Its plans are typically top competitors in their markets, cover large populations of federal employees, and are the biggest payers in rural areas where costs tend to run higher.

The partnership does not outline which specific drugs it plans to target, but the emphasis will be upon seven to 10 high-cost generics where the partners can realize immediate impact. Because the partnership must receive and develop and acquire Abbreviated New Drug Applications for its target drugs, then work with Civica and manufacturers, the first drugs won’t reach market till 2022.

If the partnership sees strong early savings, more payers will seek to join. With the BCBSA’s participation, more Blue plans could be first, and other large nonprofit insurers could follow.

With an impressive block of Blue plans already on board, Civica has positioned itself as a disruptive force in the U.S. healthcare system.

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