Inside Philanthropy: To Avert a Public Health Crisis, Three Funders Come Together

2 min
September 20, 2018


On June 12, the American Medical Association announced that drug shortages pose an urgent public health crisis that should be of concern to all Americans. Why this level of concern? Drug shortages have serious consequences. Most importantly, they often endanger patients’ lives. But even when drugs are available, skyrocketing costs make them unaffordable for many—especially the elderly.

To address the critical risks posed to patients from chronic shortages and rising prices of life-saving generic medications, three national foundations committed $30 million earlier this month to establish Civica Rx, a new not-for-profit generic drug company. The Laura and John Arnold Foundation, the Peterson Center on Healthcare and the Gary and Mary West Foundation each committed $10 million, joining seven large U.S. hospital systems representing approximately 500 U.S. hospitals as governing members of Civica Rx.

Civica Rx, the initiative previously known as Project Rx, will help patients by addressing shortages and high prices of lifesaving medications. The thinking goes that as a nonprofit, Civica Rx will have no incentive to artificially inflate or arbitrarily hike prices; the only stakeholder who matters is the patient. Since the initiative was announced in January 2018, more than 120 health organizations representing about a third of the nation’s hospitals have contacted Civica Rx and expressed a commitment or interest in participating with the new company.

Civica Rx will first seek to stabilize the supply of essential generic medications administered in hospitals, many of which have fallen into chronic shortage situations, putting patients at risk. Civica Rx has identified 14 hospital-administered generic drugs as its initial focus, seeking to stabilize the supply of essential medications, many of which have fallen into chronic shortage situations. The company expects to release its first products as early as 2019. Funds from the foundations will be used to fund programs and initiatives that will provide high-need populations with timely access to essential generic drugs at affordable prices.