A Capital Region health insurer announced this month that it’s partnering with nonprofit drugmaker Civica Rx on a new venture designed to bring down the rising cost of generic medicines.
BlueShield of Northeastern New York in Latham is one of 18 Blue Cross and Blue Shield plans that have pledged to invest $55 million in the formation of a Civica subsidiary whose sole mission will be to acquire and manufacture high-cost generic drugs and then sell them at affordable rates to local markets.
In return for the lower rates, the drugmaker will be guaranteed market volume and multiyear purchase commitments from the health plans.
While the companies have not yet identified or disclosed the drugs they plan to manufacture, they have publicly said that their plan at least initially will be to prioritize drugs with “high potential for savings.”
The first generic medications — or copycat drugs developed when a brand name’s patent and exclusivity period ends — should hit local markets by 2022 under the new partnership, officials said.
“This new partnership reflects BlueShield’s commitment to lowering health care costs, improving access to much-needed medications and most importantly enhancing the health of our community,” said David Anderson, president and CEO of BlueShield of Northeastern New York. “It’s an innovative solution that will help shape the future of health care for BlueCross BlueShield members across the country, including the members BlueShield proudly serves in the Capital Region.”
The new subsidiary is expected to target drugs that are either in short supply or at risk of short supply, as well as single-source generics that have experienced “very steep” price increases in recent years, said Dr. Tom Schenk, senior vice president and chief medical officer at BlueShield.
“Right now you see drugs suddenly become scarce and what’s happening is one manufacturer may be going offline,” Schenk said. “Another thing you see is consolidation of generic drug manufacturers to the point where they almost become like a monopoly that can set prices without worrying about competition.”
Rising prices for brand-name and generic medications are taking a toll on Americans. A 2019 Consumer Reports survey, for example, found that adults who reported annual increases in their prescription drug costs were almost twice as likely to not fill a prescription, forgo medical treatments and tests, cut back on groceries or get a second job.
While generic drugs are typically lower priced than their brand-name counterparts, a confluence of market trends has been driving their prices up, Schenk said.
Source: Times Union