Civica Rx's first CEO, Martin VanTrieste, talks about the company's ambitions for 2019 and beyond

 Intermountain Medical Center
Led by Intermountain Healthcare, a group of hospitals banded together earlier this year to form their own drug company called Civica Rx in a bid to take on the timely and pervasive problem of drug availability and cost. (Intermountain Healthcare)

When Martin VanTrieste left his executive role at Amgen, he said he was retiring.

He’d started out as a pharmacist, working in formulation development for a large pharmaceutical company, and went on to ultimately become the chief quality officer of a drug giant. But earlier this year, he jumped on an intriguing opportunity: A group of hospitals wanted to start a drug company in order to stabilize the availability and cost of lifesaving generic drugs called Civica RX.

Martin VanTrieste (U.S. Senate)

Van Trieste agreed to lead it without drawing a salary. “I always felt a desire to serve patients. It’s always been how I operate,” VanTrieste said. “This was an opportunity where I could give back and serve patients.” 

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I recently had a chance to speak to VanTrieste as he visited D.C. and chatted with him about the latest for that company and its plans for 2019.

FierceHealthcare: What is the status for your work building up Civica Rx? 

Martin VanTrieste: We’ve had more than 120 health systems contact us and express interest. We’re just rapidly trying to follow up and sign these organizations up with Civica because that’s important. The more members, the stronger the company is going to be in terms of working with people who make the product for us.

FH: How does this work for hospitals? Would you describe it like an investor model?

MV: What we require is a one-time donation from the health system and that will create the capital that will fund the company. There is never a payout from us. The value the hospital gets is the drugs they can’t get today because they are on and off drug shortages because we’re going to create a stable supply, a robust supply chain. … One of our surgeons from one of our member systems came up to me and said ‘You know, it’s easier for me to buy morphine on the street than from a pharmaceutical company because it’s on shortage right now.” So more importantly: "Is that consistent availability and predictability or those drugs being available?"

FH: What gets the manufacturers on board? 

MV: Typically for a sterile generic injectible, four to seven [companies] have an approved license. But because the way contracting has worked in this chase for the bottom, and everyone sole-sourcing so they can get the best price, only one or two [companies] are actually making the drugs right now. So first we go to those other manufacturers who already have the approved license and ask if they want to work with Civica. We say we want a fair and sustainable price.

We’re not chasing to the bottom and we’re going to guarantee you the business for the long-term, five, seven, 10 years out, depending on the product. That guarantee has teeth in is because it is a take-for-pay contract. It's not just a promise.

FH: But this is more than just contracting the work out, right? 

MV: The fastest way to market is to work with those who already have an approved license that wants that certainty in their manufacturing process.  But the second part is we already have an R&D team working on generics for ourselves. These are drugs really no one is making any more today that are essential in hospitals. We will then file for the licenses with the FDA and then we’ll take those to contract manufacturers. We’ve already started that process.

We will eventually buy or build our own manufacturing capacity and that way we can control the costs better and the reliability. But we’ll also keep the marketplace a little bit of a policeman in the marketplace so that nothing goes awry with people over time, getting used to who we are, this will keep the competition.

FH: What’s the first product going to be? 

MV: I can’t tell you. We haven’t disclosed our product list, but I would say people could kind of figure it out. There have been over 200 drugs over the last 10 years, the same drugs, that have been on and off the FDA shortage list or the American Society for Healthcare Practitioners shortage list. Clearly, those are some of the targets. They have to be essential medicines for the hospitals. So we’re only going to be focused on hospital-based medicines which is mostly sterile injectables. And the third part of it is any time there’s predatory pricing like the isoproterenol, it’s clearly a target for us. We have 200 targets, we can’t do 200 things at one time, so we focused on what our members say are our top 30 products. 

With that, we looked at that 30 and said we could do probably 14 in the first year. We’ve committed to our members in 2019 that’s we’ll probably get 14. I will say once we started doing this that I have a more positive outlook on what we’re going to deliver so I think we’re going to beat that number. 

FH: How large is your team?

MV: Our R&D team is a mixture of employees at Civica and contract research organizations that work at our direction. It’s really the fastest way. The size of the team will grow as the business grows. I always tell people results produces resources. So we’ve got to have some results first. 

FH: What kind of jobs are those? 

MV: These are what you call development scientists, so they aren’t focused on the clinical studies. These are people who have degrees in pharmaceutics, chemistry, the life sciences part of the business. You have to reverse engineer what the competition has done and you have to figure out how to make it yourself after that. Since we don’t have to do clinical and they are sterile injectables—so we don’t have to do bioequivalency studies—usually within 12 months, you’ll have enough data to send to the FDA. And then the FDA usually takes around 12 months to grant approval. From the time we start the development process to the marketplace, we’re probably looking 24 to 30 months down the road. 

FH: What did you like about this opportunity?  

MV: Because we’re not a for-profit company, we don’t have to publish quarterly results to Wall Street, we don’t have the pressure to raise our stock prices to make a dividend payment, we have that opportunity to reinvest more in the business. We invest more in the business so we can get more drugs into the hands of the hospitals that serve patients. Serving patients is a privilege. That privilege comes with responsibility.