EP31: A Dose of Prescription Drug Disruption
Gina Guinasso, president at CivicaScript, talks about the exorbitant costs in today’s prescription drugs and how her organization – together with the industry – is leveling the playing field by distributing generic drugs directly to pharmacies. In her conversation with host Andy Chasin, Blue Shield of California’s Vice President of Federal Policy and Advocacy, she discusses the beginnings of CivicaScript, spotlights industry factors that have led to inflated drug costs, and outlines how transparent drug pricing and direct distribution to pharmacies can make drugs like insulin more affordable and accessible to patients across the country. Visit Civicarx.org to learn more about CivicaScript and the company’s mission to provide equitable pharmaceuticals at the lowest sustainable prices to patients.
Host: Andy Chasin
Hi, everyone. I'm Andy Chasin, Vice President of Federal Policy and Advocacy for Blue Shield of California and your host for this episode of the Healthy Dose of Dialogue podcast. I'm excited to kick off season three of the podcast with my guest Gina Guinasso.
Gina is the President of CivicaScript – a nonprofit drug company dedicated to lowering the price of select high-cost generic medicines. She took the helm of Civica as president in May 2021, almost a year ago. But prior to that spent more than 20 years in the biopharmaceutical industry in a number of diverse and important roles. In this episode, we'll get Gina's insights on the pharmaceutical landscape and how the industry can work together to make life saving medications more affordable for individuals and families across the country.
Those of you who know me are aware that I'm an evangelist for fixing the broken market for prescription drugs, which results in Americans paying far more for the same drugs than in any other country in the world. And one of the things I'm proudest of is my role in helping develop the business model and raise the funding to start CivicaScript. In my view, there is no better validation of this model than the fact that we were able to attract a talent like Gina. Thank you for joining us, Gina.
Guest: Gina Guinasso
Thank you, Andy. It's great to see you and a pleasure to be here today.
Host: Andy Chasin
So why don't we start at the beginning. We know that Civica is a nonprofit drug manufacturer. Tell us about Civica and CivicaScript, their relationship and why a nonprofit drug manufacturer is important and viable right now?
Guest: Gina Guinasso
So it all started with Civica. Civica was created to solve for a very specific problem that for decades, conventional pharma companies couldn't solve – and that was hospital shortages. Continuously having shortages of hundreds of medications, that were really harming patients, and making it very difficult for hospitals to do what they do best: take care of people.
So it was 2018, when a group of health systems and philanthropies launched Civica. It's a non-stock, nonprofit generic company with a very specific mission to make quality, generic medications. The expectations both from the company and those involved in founding and funding it were greatly surpassed over the last few years. They have over 55 health systems, there are 1/3 of the hospital beds in the country as members of Civica, over 77 million vials at this point have been produced and delivered to patients. And I believe there are over 60 products on the Civica hospital side at this point. So they've been wildly successful. One of the unknowns and one of the things that really tested supply chain and drug manufacturing was COVID. And I'm very proud to say that during COVID, there were 11 essential drugs that Civica produced and they had no issues at all with shortage.
So what happened was about two years ago, they realized there were other problems to solve for outside of the hospital. And that was outpatient drug costs. So when we think about generics, people think that they're low cost, they are effective. And the reality of it is some are and some are very reasonably priced. Many are not. And so what they did is they said, Let's launch a company CivicaScript, separate from Civica, but really still a mission driven company where no one profits, dedicated to making affordable medications in the outpatient market for people that need them. About a year ago, as you said, I had the pleasure and the privilege of joining this mission. And we will be this year launching our first outpatient drug from CivicaScript.
Host: Andy Chasin
So you've been in the healthcare and pharmaceutical industry for more than two decades, you started on the drug company side moved to the PBMs with Optum, obviously one of the most dominant players in the market where you were a senior executive. And now you're CEO of a scrappy startup trying to disrupt both the pharmaceutical and PBM business. So it feels like there's a story there. What made you want to take a risk on a startup like Civica? And what really drew you to its mission?
Guest: Gina Guinasso
So there's probably a lot of stories – a few I probably shouldn't tell today – but I will say I do like a startup environment. Even on the brand and pharma side. I've worked for startups. So that part I liked. I think it starts really the journey here starts really when I, when I took a role with the PBM. I quite frankly wouldn't have been qualified to help make this initiative work if I hadn't had that experience. And it was while I was at Optum and doing the good work of trying to lower the cost of drugs, the way that PBMs do, that certain author and book caught my eye. And the name of the book is “Bottle of Lies”. The author is Katherine Eban.
And I was just attending a continuing legal education, she was speaking, and I just was mesmerized by the message, ran out, got the book. And then ironically, two months later, I get a call. And they're talking about this problem with generics. And Katherine's book had a lot more to do with quality. But cost is a part of it, too. And so immediately, I was interested in what was happening. I was not a part of the journey as early as you, but I recalled those original press releases about Civica and what they were doing, then, you know, met the team. And I think you've had a lot of interaction with the leadership team at Civica, some of the most passionate and dedicated, brilliant people got together and created what they created there. And I just was absolutely mesmerized by what they had accomplished. And just felt really honored that I could be a part of this and help with the outpatient side, which is where my experience lay. So I was just thrilled to be able to say yes, and that they wanted me to help.
Host: Andy Chasin
I read that book as well. And one of the things I think is great about CivicaScript is that, you know, the book talks about kind of the bottoming out of the market for generics, right. And so this drive to like the very, very lowest cost, and then quality gets lost. But that Civica even though we're bringing down the cost of drugs isn't meant to be the lowest in the market, right? We're designing, you know, business to make the market for generic drugs more sustainable to bring entrants in and not have that kind of back and forth between cost and shortage and quality. But just to make it sustainable across the board.
Guest: Gina Guinasso
I think that's critical. As we think about some of the dynamics that cause shortages, oftentimes it is because manufacturers raise and lower prices, drive competition on the market, leave the market. So what we need to do to make this work is build a sustainable Civica and a sustainable CivicaScript so as we do bring these quality medications to the market, we can keep them in the market. We have no intent of solving what we think the problem is today and withdrawing the drug.
The goal is really to launch at a low sustainable price to keep the company going. And in the future as we grow, we could even potentially be taking our price points down. Certainly, you know, our hope is that we will continue to at least keep them low or lower than when we launched with. But to your point, sustainability is key. So we will price as low as possible to make sure that this company exists and continues to be really the conscience of the market in many ways.
Host: Andy Chasin
Yeah, I think that framing the conscience of the market is exactly right. And that you mentioned COVID, but just the importance of onshoring some of this production so that, you know, when we do have these supply chain issues that, you know, the US has manufacturing and supply to turn to rely on.
Building on that, so CivicaScript is not designed to be one of the biggest players in the market. It's really meant to be, as you said, the conscious of the market, and a check on the market’s biggest failures. In your view, how will you know if and when CivicaScript has been a success?
Guest: Gina Guinasso
You know, we measure everything we do by helping patients. So we will know we're a success when we are connecting people that need medications with our, with our CivicaScript outpatient drugs in the same way that Civica has. But I would say leading this company, it's very important to me that we build again, a sustainable company.
So I would say success looks like 20 years from now, we're still doing the same thing. We haven't changed our principles. We haven't changed our mission. And we're still providing what we think are very high-quality drugs at a reasonable price. The uniqueness of not needing to make a profit is huge. You know, that will be a key differentiator now and, in the future, because we don't have to bring profits back to shareholders. There's no companies that will profit from us. So I think the future is quite bright.
Host: Andy Chasin
And tell me another thing that I think is unique about Civica and that could have a lasting impact is the model where there are no rebates for any Civica drugs - Civica or CivicaScript - and the pricing is the same for anybody who purchases a Civica drug or CivicaScript. Can you talk about why that's important in the market?
Guest: Gina Guinasso
You know, it's really interesting because if you're not in the industry and talking about drug pricing like you and I do every day, you don't realize that there is a really big lack of transparency in what drugs cost and what people pay for them and what companies pay for them. So what we're doing very differently is we have one direct price for everyone. It is public, it is known, and that one direct price is what everyone pays.
Now, oftentimes, you can see a direct price for a drug. However, what we don't see are those hidden price concessions. People talk about rebates all the time and that is something that drives up the price for consumers. But there's just as many price concessions on the generic drugs that go into the channel to wholesalers, and to GPOs into pharmacies. And again, if you're not in the business, you don't realize that those hidden price concessions are not passed through to patients. So the problem isn't that discounts are inherently bad. The problem is patients never benefit from them.
So the key to what we're doing is not only having the transparent price that we sell to pharmacies, but also putting a transparent price on our medications, on our prescription medications, that will ultimately be in the hands of a patient. I don't know that it's ever been done before. We're going to put a QR code on a bottle of pills or tablets, for insulin. And remember, on the packaging, where a consumer a patient can use their smartphone and look and see a maximum retail price. And now, they shouldn't have been charged more than that. And if they are – to go back to the pharmacy, to go online to our website, and to find out what went wrong there. So I think the critical part is transparency, but also the transparency going all the way to the patient level.
Host: Andy Chasin
I think people don't understand how revolutionary that type of transparency is. And as we've been trying to bring these drugs and get them into the hands of our members. You know, we've been talking on the phone a lot with our teams about how to do that.
And it's just amazing, you touched on it in your last response just how complicated the system has become and it feels like there are roadblocks to making the market function better at every twist and turn from the rebates to how you distribute the drugs. In your mind having worked kind of on all sides of the industry, what are the two or three biggest factors that really make drugs in the U.S. so expensive as compared to other countries? Is it the rebates? Is it kind of the PBM role? Is it just the price set by manufacturers, help us sort through all that?
Guest: Gina Guinasso
So you know, I think it's really different depending on which drug you're talking about, right? So as we talk about insulin, what's keeping prices high for patients is typically those PBM rebates. There are very good examples of where there's just not enough competitors. So a handful of manufacturers can charge more than they need to. So a different kind of problem.
There is also a really big problem with outpatient generics, that have wildly inflated, as we call it list prices. That meant patients and payers, Blue Shield of California end up paying when the reality is the drug is thousands of percent less. And so I think there's different problems. But we do believe the solution we're building can address all of them.
When I say we're not going to have hidden price concessions, they won't be rebates, they won't be discounts to pharmacies, it kind of solves for both. So we do believe that this whole different pricing platform and Transparency can be applied to any drug, regardless of whether that manufacturer is charging too much, whether it's a channel issue, a PBM issue. And I think that the key to success here is really organizations like yours.
You know, when you think about it, payers got together and created this with Civica because they knew that their beneficiaries were being charged too much. And they couldn't even totally control it on their own. And so what did they do? They said, ‘Let's partner with a manufacturer, let's fund and found and work together with a manufacturer to make high quality generics and make sure they get to patients.’
So as I think about the partnership with you and others and the pharmacies that we're going to work with that are going to agree not to mark up these drugs, the critical myths as we think about this being a solution is not just our pricing and our transparency, it's our partners. This would never work if all of the Blue Cross Blue Shield plans, the Association, Anthem recently, HCSC, others, hospitals, foundations, if we didn't have all of those people at the table, this wouldn't even get off the ground.
Host: Andy Chasin
Yeah, we kind of have this belief, like, if you build it, people will come. And it really has been, you know, putting the model out there. You know, getting somebody like you running it. Now, you see, continued movement towards this. And I think a lot of that is, you know, the announcement that you made recently around insulin, which made national headlines, not surprisingly.
But when we were, you know, looking at doing this and talking to different plans and organizations about investing, the first question that we got, you know, in every meeting was, what about insulin? Obviously, a drug, that’s critical to people who have diabetes are using it every day, reliant on it to live, but the cost of that drug is just wildly inflated. And the fact that CivicaScript was able to announce that you had raise the funding to, to bring insulin to the market, as a nonprofit drug, really, I think, is proof of the model far ahead of when, you know, even I, as an evangelist for this study, I thought we would be there. So could you talk a little bit about just insulin and how you're able to bring that to the market at such a lower cost and what you think that'll mean to people who have diabetes and rely on this drug?
Guest: Gina Guinasso
Yeah, and it's, it's been a really exciting journey. And you've been doing this, you know, for a few years longer than me, because it's been a year for me. And when I started, I knew what my job was, I'm going to make sure we get these generics launched and we get them in the hands of people that need them.
Within two months, suddenly, we had the biggest opportunity that we say, you know, we're going to change the world. And it was that we had an opportunity to go out and raise money and become a partner to a company that had our R&D program already underway. And so very quickly, a lot of focus changed. And rapidly, we went to all of the Civica and CivicaScript founders and others. And there has been so much momentum and excitement and charity, to allow us to raise the money to bring insulin to the market where not only as a nonprofit, we don't need to make a profit, we can just break even, but the development costs are paid for through the kindness of the charitable donations of many organizations. So we don't even have to charge more to sort of recoup what was put into R&D, which is just very unique.
So we are wildly excited about what is going to happen in 2024. We're tackling the three most common insulins that most people use: we're going to be bringing biosimilars to Lantus, to Novolog, and to Humalog to the market.
The team is working as quickly as possible, because as you said, this is a big problem. I mean, I can't think of any other drug that is always the first one mentioned when people talk about drug pricing. You know, the world that you're in DC and the policymakers that are trying to fix it, insulin is number one on everyone's list. And what we've seen is other manufacturers haven't chosen to or been able to do what we want to do. We want one low sustainable price that ultimately every patient can benefit from. Some people have very good health benefits and they don't pay too much for their insulin, but too many people do. And so by bringing this to the market, it's just going to change the dynamic for every patient. They will have an alternative that is affordable. And we just couldn't be more excited to bring that. And quite frankly, I'm glad we have a little bit of time to prepare but I also wish it was next week. You know, there's so many people in need that that you know, it can't get here soon enough.
Host: Andy Chasin
Yeah, I totally agree with you. And so insulin, obviously 2024 looking for that, but Civica is ahead of schedule on bringing drugs to the market. And we expect to have drugs in the market this year, which is really phenomenal. Obviously a lot of drugs that you could target with this nonprofit model. Can you talk about – I know we can't talk about specific drugs because the market impacts you know are real. But can you talk about kind of what type of drugs that Civica is targeting and how you think about where you want to lean in?
Guest: Gina Guinasso
Yeah, so we have several drugs already in development. And to your point, we're going to be launching our first one this year. The first drug is an oral drug for cancer.
And so as you think about which drugs we want to target, we have, again, the advisory committee, we call it drug selection advisory committee that your entity sits on as well. So there's no one in a better position than payers to say: these are the drugs that are most difficult from a financial perspective for patients and their essential medications. So through the work with our partners, we identify drugs that have a lot of people that need them, they're essential, and for whatever reason, either lack of competition or channel dynamics, the price at the point when a person is picking it up at the cash register is just too high. So as you think about that dynamic, many of them will be specialty, some of the more traditional brands. We are agnostic to disease state. We want to tackle the ones that will truly make the most difference and benefit patients the most.
Host: Andy Chasin
Yeah, and I think that's critical. I mean, there's, there's a lot of drugs out there that are too expensive, but the fact that we're tackling drugs, cancer, and that's like conditions people have to have these drugs, to address their critical diseases, in some cases, you know, life threatening, I think just gives even more meaning to the work that you're doing.
So, could you talk for a minute, I know, we talked about the need for stable supply. But, you know, one of the other exciting opportunities too that’s evolved is Civica opening a manufacturing facility, which will allow you to have a whole new kind of toolbox on what drugs you can produce. So can you talk a little bit about how that's moved forward, and where CivicaScript might come into play with that facility?
Guest: Gina Guinasso
Yeah, so that facility is in Petersburg, Virginia. We're thrilled with the progress. It is one of those other reasons why insulin was just all of the stars aligning – the right partner that had a quality R&D program simultaneously with a facility that was half built, let's say, that will be finished at the exact perfect time when we're going to want to use that facility for insulin. So again, it was one of those critical things that everything aligned and went very well.
Now, our CivicaScript generics, the capsules and tablets won't be produced there. But we are already working on the lines that will be handling Civica insulin. So again, it was just very fortuitous. And this team was just ready to react. And to very quickly, say, we'll go, we'll raise the money, we bet the facility and we're going to be able to bring affordable insulin in the next couple of years. So that facility, although initially not specifically intended for insulin, is the right kind of facility to make insulin. So yeah, very excited about the timing of it. And hopefully making it at full capacity very quickly so that we can bring as much insulin as possible to the market.
Host: Andy Chasin
Yeah, I think it's just another example of how when you bring this model to the market opportunities open up and it seems like that's really the story of Civica from where, where I've sat.
Maybe I could run a few rapid-fire questions by you. You've had this great career and continuing to do, you know, really interesting things. But if you can go back in time, what kind of advice would you have for your younger self?
Guest: Gina Guinasso
You know, I think my career does look a little disjointed. You know, having been in the branded side, and then a PBM, very few people make that choice. And then locking into the opportunity to serve, you know, the folks that we're serving over here on the CivicaScript side. So I think I would just tell people to be very flexible and open.
I'm a lawyer by training, I've never worked for a law firm. So I think it's important that regardless of what you think you want to do, that you remain open to new ideas, to new concepts, to getting a call from Martin VanTrieste to talk about Civica and what they want to do with CivicaScript. I do think all of those things are important as people move through their career and not to just stay on one side of the fence. I wouldn't be qualified to have these conversations that you and I get in if I hadn't been both on the manufacturer and the PBM side. So I think a lot more integration and swapping roles in different sides of the table is really helpful for people and you learn more than you could ever learn from the outside looking in.
Host: Andy Chasin
Yeah, absolutely. I can vouch for the fact like you bring such a diversity of perspectives and especially understanding the distribution side, we cannot move forward without that kind of deep knowledge that you bring to the table. So maybe I'll finish. What's one of the things you're proudest of in your career?
Guest: Gina Guinasso
You know, I feel like I shouldn't say this, because I'm not done. But it's this, you know, I have never done anything so meaningful and been around this talented group of people that are really changing the world. Policy number one at Civica is do what’s in the best interest of patients. There are no other companies that their written policy number one is do what's in the best interest for patients. And so we live that, we breathe it every day. My journey here is not done. But I already know, in this the first year, this is the most meaningful thing I've ever done. And I hope if you and I will, and well you and I will still be doing this work, there's no doubt in my mind, in five years, hopefully, you know, the answer will be the same. And that the answer will also include some of the things I mentioned about Civica. The number of patients we've served, how much money we've saved people and things like that. But yeah, there's just never going to be another opportunity that this won't be the most meaningful.
Host: Andy Chasin
Yeah, well, we are proud to be part of this journey and really proud of the work that Civica is doing. And I agree, I think the trajectory of CivicaScript and opportunities are, are just revealing themselves. So…
Guest: Gina Guianasso
We wouldn't be here if you and a few other people didn't make some choices very early on that you guys could tackle this. I mean, your organization, yourself included, was very involved in just ideating this and saying: We can do this, let's figure it out. Which is really cool. What are you most proud of? Because I hope it's this.
Host: Andy Chasin
Yeah, I think this is this is definitely up there on my list. I mean, it was one of those when when we saw the news about what Civica was doing, I just knew immediately, this is something we had to do. And it was just the time to persuade people to share that vision and just seeing you know, additional partners continue to come online, including major for-profit companies. You know, I'm in it for the cause and the disruptive opportunity but to see some really sophisticated players joining up just really validates the work that we did at the beginning. And I'm really proud of that. So for a lawyer to if you hadn't been here, lawyers that would be doing a great business. I think that's, that says it all.
Host: Andy Chasin
Thank you for taking the time to listen today. I hope you walked away with a better understanding of how CivicaScript will bring affordable and sustainable medications to more consumers and how committed Gina and Blue Shield are to the mission to transform the market for high costs generic medications to make them more affordable and accessible. To learn more about CivicaScript, please visit www.civicarx.org.
And please join us next time as we continue to bring you a healthy dose of insights and perspectives based on conversations with leaders who are transforming healthcare. We'd love to hear your feedback. Share your comments and let us know your thoughts by writing a review on Apple podcasts. You can also join the conversation on LinkedIn or Twitter @doseofdialogue or visit our website at doseofdialogue.com. Thank you.
Join the dialogue
