Nov 17, 2018

A nonprofit drugmaker steps into the fray

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Data: Q1 2010–Q1 2015 from U.S. Government Accountability Office, Jan. 1, 2016–Nov. 9, 2017 from Elsevier; Chart: Harry Stevens/Axios

Generic erythromycin, an antibiotic, saw price hikes every year from 2010 to 2017, ultimately ending up roughly 50 times more expensive than it started. It's not alone.

The market-based solution to this problem would be for a new company to start manufacturing those drugs. Often, however, there's a market failure, and the drugs remain hard to find or exorbitantly expensive for years.

At any given time, roughly 200 drugs fulfill four criteria:

  • They're available in generic form.
  • Like erythromycin, they're on the World Health Organization's list of essential medicines.
  • Their price has increased by more than 50%, in a way underlying market conditions can't justify.
  • They have suffered shortages that have harmed patients.

Enter Civica Rx, a nonprofit that intends to solve the problem by not making any money at all.

  • Civica is a consortium of seven hospital groups and three philanthropies. They've each already donated $1 million to the nonprofit, and have pledged to make at least $9 million more in loans, if necessary. That's total funding of $100 million.
  • Its hospital members can enter into a multi-year binding contract to buy large quantities of any given drug. That gives Civica, as a drug manufacturer, a lot of certainty when it comes to future demand.
  • Civica then contracts with its own vendors, locking in drug supplies for many years.

"Most generic manufacturers will never even run into us," says Dan Liljenquist, Civica's chairman.

  • Civica is not a danger to the generic drug industry; it will operate only as a manufacturer of last resort in the rare cases where that industry has experienced market failure.
  • "We don’t need to fix the whole market," Liljenquist tells Axios, "because the whole market’s not broken."

Expect to see Civica's first drugs hitting the market as early as the second quarter of 2019.

Go deeper: Read the rest of Axios' Deep Dive on prescription drug prices

Go deeper

The right and left internet loves Anthony Fauci

Data: Newswhip; Chart: Naema Ahmed/Axios

If you feel like you're suddenly spending a surprising amount of your days thinking and talking about Anthony Fauci, you're not alone. He's become the third-most talked about person online, according to data from NewsWhip provided to Axios.

Why it matters: Fauci, the director of the National Institutes of Health office that deals with infectious diseases, has quickly become a household name, and one of the few household names with (mostly) bipartisan credibility.

The push to multiply limited medical supplies

Illustration: Eniola Odetunde/Axios

Health care workers and the federal government are scrambling to stretch limited supplies of medical equipment.

Why it matters: We can’t manufacture enough medical masks or ventilators in time to meet the enormous surge in demand that's expected to hit in mid-April. The next-best thing is trying to make what we have last as long as possible.

Coronavirus dashboard

Illustration: Sarah Grillo/Axios

  1. Global: Total confirmed cases as of 10 p.m. ET: 1,014,673 — Total deaths: 52,973 — Total recoveries: 210,335Map.
  2. U.S.: Total confirmed cases as of 10 p.m. ET: 244,678 — Total deaths: 5,911 — Total recoveries: 9,058Map.
  3. 2020 updates: The Democratic National Committee said its July convention will be postponed until August because of the coronavirus. A federal judge declined to delay Wisconsin's April 7 primary election.
  4. Jobs latest: Coronavirus unemployment numbers are like a natural disaster hitting every state.
  5. Public health latest: Anthony Fauci called for all states across the U.S. to issue stay-at-home orders. The FDA will allow blood donations from gay men after 3-month waiting period, citing "urgent need."
  6. Business latest: Treasury Secretary Steven Mnuchin said oil companies are eligible for aid from new lending programs the Federal Reserve is setting up, but not direct loans from his department.
  7. U.S.S. Theodore Roosevelt: Navy removes captain of aircraft carrier who sounded alarm about coronavirus.
  8. 1 future thing: In developing countries, consequences of COVID-19 could be deeper and far more difficult to recover from.
  9. What should I do? Answers about the virus from Axios expertsWhat to know about social distancingQ&A: Minimizing your coronavirus risk.
  10. Other resources: CDC on how to avoid the virus, what to do if you get it.

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