LJAF, Others Commit $30 Million to Establish Nonprofit Drug Company

LJAF, Others Commit $30 Million to Establish Nonprofit Drug Company

The Laura and John Arnold Foundation, the Peterson Center on Healthcare, and the Gary and Mary West Foundation have committed $10 million each to establish a not-for-profit generic drug company.

To address the critical risks posed to patients from chronic shortages and rising prices of life-saving generic medications, the two foundations and nonprofit health center are each contributing an initial $1 million and committing $9 million in loans to establish Civica Rx, joining seven large U.S. hospital systems — Catholic Health Initiatives, HCA Healthcare, Intermountain Healthcare, the Mayo Clinic, Providence St. Joseph Health, SSM Health, and Trinity Health — representing approximately five hundred hospitals as governing members of the company. With an initial focus on fourteen hospital-administered generic drugs, Civica Rx will work to stabilize the supply of essential medications, many of which are chronically in short supply. The company expects to release its first products as early as 2019.

For their part, LJAF, the West Foundation, and the Peterson Center will work to support the company's social welfare mission to ensure a predictable supply and competitive marketplace for essential generic drugs. To that end, funds provided by the three organizations will be used exclusively to fund programs and initiatives that provide high-need populations with timely access to essential generic drugs at affordable prices.

"The chronic shortage of critical drugs compounded with skyrocketing prices is a double blow to our most disadvantaged populations," said Kelli Rhee, president and CEO 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."