Insurers Start Drug Company To Lower Prescription Prices

A group of 18 Blue Cross Blue Shield health insurers is helping to create a nonprofit drug company to make certain generic drugs itself. The insurers are targeting medicines where there is a lack of competition and a need to bring down prices.

The insurers announced they will spend $55 million to partner with Civica Rx to create a new subsidiary dedicated to lowering the cost of select generic drugs.

The subsidiary is being formed in response to the impact of high drug costs on the health of Americans and the overall affordability of health care. Other health plans, employers, retail partners and health care innovators are invited to join the initiative, a news release from the Blue Cross Blue Shield Association and Civica stated.

Civica is a nonprofit organization formed in 2018 by three philanthropies and numerous health care organizations in an effort to combat drug shortages and price spikes in hospitals. While Civica had been focused on providing drugs to hospitals, this partnership will focus on drugs that are purchased at pharmacies outside of hospitals.

In this partnership, the Blue Cross Blue Shield companies want to bring select high-cost generic drugs to market for consumers. The subsidiary will acquire and develop Abbreviated New Drug Applications for select generic drugs and partner with Civica and manufacturing partners to bring more affordable generic drugs to uncompetitive markets in exchange for higher volume and multiyear purchasing commitments.

Initially, several generic medications identified as having high potential for savings will be prioritized by the partnership and will evolve into a platform that can be used to enhance competition for additional generic drugs.

The first drugs will become available in early 2022, the insurers said.

BCBS companies currently participating in the Civica partnership include:

Blue Cross and Blue Shield of Alabama, Arkansas Blue Cross and Blue Shield, Blue Shield of California, Capital BlueCross, CareFirst BlueCross BlueShield*, Excellus BlueCross BlueShield*, Blue Cross and Blue Shield of Hawaii, Highmark Blue Cross Blue Shield, Horizon Blue Cross Blue Shield of New Jersey, Blue Cross of Idaho, Independence Blue Cross, Blue Cross and Blue Shield of Kansas, Blue Cross and Blue Shield of Kansas City, Blue Cross Blue Shield of Michigan, BlueCross BlueShield of Western New York and BlueShield of Northeastern New York, Blue Cross & Blue Shield of Rhode Island, BlueCross BlueShield of South Carolina, Blue Cross and Blue Shield of Vermont and the Blue Cross Blue Shield Association.