Generic-drug company Civica Rx pledged that it will deliver drugs to member hospitals and will accommodate hospitals if they use wholesalers to purchase the products.
So far more than 800 U.S. hospitals have joined the organization founded by Intermountain Healthcare, SSM Health, Trinity Health and Ascension, which has since left the group.
The company is expected to have its first generic drug on the market this year. Civica Rx CEO Martin VanTrieste told the World Health Care Congress in Washington on Monday that the organization will deliver the generic drugs it makes directly to the member hospitals.
"We will not use the standard middleman approach," he said.
However, Civica Rx will accommodate a health system if it still wants to use a wholesaler to get the drug if that could be more convenient.
"Our member will know what price we charge the wholesaler," VanTrieste said, adding that the price it charges a wholesaler would be the same as a hospital.
"If a wholesaler takes a container that I sell for $1 and at the end of the system it comes out at $3 then the health system knows that they paid $2 for that convenience," said VanTrieste, a former executive with the pharmaceutical manufacturer Amgen. "We will force transparency."
Civica Rx is targeting 14 hospital-administered generic drugs that are in short supply, and it hasn't announced what drug will go to market first. It remains unclear which drug will be the first to reach the market. The company is contracting with private manufacturing facilities to make its first products.