Disrupting the Generic Drug Market: Gary and Mary West Foundation CEO Shelley Lyford on Civica Rx Launch

Shelley Lyford

Moderator: Welcome to Conversations on Healthcare with Mark Masselli and Margaret
Flinter. A s how where we speak to the top thought leaders in health
innovation, health policy, care delivery and the great minds who are shaping
the healthcare of the future . This week Mark and Margaret speak with
Shelley Lyford, CEO of the Gary and Mary West Foundation a philanthrop y
dedicated to reducing healthcare cost and improving access to services for
seniors. The foundation along with others has helped launched Civica Rx, a
new nonprofit entity that will produce and distribute generic drugs promising
to disrupt the market.

Lori Robertson also checks in, the Managing Editor of FactCheck.org. She
looks at misstatements spoken about health policy in the public domain,
sep arating the fake from the facts. And we end with a bright idea that’s
improving health and wellbeing in everyday life. If you have comments email
us at [email protected] or find us on Facebook or Twitter , iT unes or
wherever you listen to podcast. You can also hear us by asking Alexa to play
the program, Conversations on Healthcare. Now stay tuned for our interview
with Shelley Lyford , CEO of Gary and Mary West Foundation, on
Conversations on Healthcare.

Mark Masselli : We are speaking today with Shelley Lyford, President and CEO of the Gary
and Mary West Foundation, part of West Health, a nonprofit family of
organizations founded by the philanthropist Gary and Mary West. The
foundation is dedicated to lowering the cost of healthcare and improving the
quality of healthcare services for America Seniors allowing them to
successfully aging place. She also leads the Gary and Mary West Health
Institute which conducts health research on issues affecting seniors and the ir
families . T he West Health Foundation recently joined new venture, Civica Rx,
a nonprofit drug making and distribution entity seeking to address the rising
generic drug cost . Shelley, welcome to Conversations on Healthcare.

Shelley Lyford: Thank you, and I am delighted to join the conversation.

Mark Masselli: Well that’s great and I can ’t help but think that around the kitchen table for
so many seniors and their families and billions of other Americans, the
conversation about the high cost of medicines in this country. And the Gary
and Mary West Foundation has decided to take a step in trying to address
this issue by partnering with several health systems like Mayo Clinic,
Intermountain Healthcare, launching this new nonprofit company that will
manufacture and distribute its own generic drugs, if you could tell our
listeners more about the launch of Civica Rx and how this venture came
about and what you hope to accomplish?

Shelley Lyford: For far too long Americans have been hostage to pharmaceutical compan y’s
price gouging and price manipulation. In American we all pay a price and
lower - income patients actually shoulder a particularly heavier burden and
there are shortages of critical generic drugs and those shortages have
escalated to what I consider an in tolerable situation. So for us, the Gary and
Mary West Foundation, we felt along with a group of other foundations and

Shelley Lyford

several healthcare systems, it is time to put patients before profits and to
actually begin the transformation of healthcare that America ns deserve.

So what we have focused on is providing access and lower cost to a body of
critical generic trends that are injectables in hospital setting. So we are going
to start off with really basic things . T he Gary and Mary West Foundation
committed $10 million to create Civica Rx , t he new not - for - profit non - stock,
mission driven generic drug company. W e can assure there will be no
financial gain to the entity and we will adjust the shortages and high prices of
life saving medications. W e are also going t o help ensure that essential
generic drugs are available and affordable to everyone, especially high needs
populations.

We are standing arm - in - arm with Arnold Foundation and the Peterson
Foundation and seven healthcare systems. So this group of entities i s actually
considered the governing members of Civica Rx, none of the members will be
able to derive any economic benefit from the company . A nd as a founding
member of Civica Rx, the foundation will endeavor to disrupt the increasingly
inefficient generic drug market, which as you know is generating excessive
shortages and rapidly escalating prices for drugs needed by hospital seniors
and other vulnerable patients throughout the country.

Margaret Flinter: Shelley, I am so appreciative of the fact that you a nd the other
foundations and health systems that you are standing arm - in - arm with chose
to do something about it and particularly for all those who remember when
those same generic drugs cost less than $5 for a treatment around.

Shelley Lyford: Margaret, s omething really extra ordinary hit the past, and that was there
was a 400% drug price increase in an antibiotic mixture that has been around
for decades that went from $500 per bottle to $2,300 per bottle. And this is a
drug that is listed by the World Heal th Organization as an essential
medication to lower urinary tract infections , i t’s unbelievable.

Margaret Flinter: Right, you have noted that what you are doing is a response really to
the epidemic of opaque pricing in healthcare across the board, not just in
medication. But also includes the pricing of virtually every service that one
receives a nd that also is part of what the AMA has called the public health
crisis. So talk for a listeners a little bit about this culture of murky or opaque
pricing and how this really affects American healthcare consumers.

Shelley Lyford: T here are multiple reasons why generic drugs are in such short supply, but
the primary culprit is the opaque and manipulated marketplace that we have
in our American Healthcare Systems . It ’s a market place that is controlled by
pharmaceutical companies, putting profits before patients. For far too long,
in America we have been held hostage to drug companies charging excessive
prices for their products and that forces of all to pay the price and it also
contribute s to the creation of the most expensive healthcare system in the
world. And there are shortages of drugs and th at forced hospitals to
scramble, to secure scarce medications and then we have to pay th ese

Shelley Lyford

exorbitant prices for not only generic drugs but the drugs, the hard to find
drugs.

W hen we kind of take a bigger step back and we look at the lack of price
transparency and how we operate in America, in the healthcare system, the
Gary and Mary West Foundation believes that there is a lot of inaction in
Washington DC that there is no transparency and the murkiness is
purposeful. In the end we have launched several national surveys showing
what the American public think about the cost of care and drug pricing. In
March, our survey with N ORC at the University of Chicago showed that about
40% of Americans report skipping a recommended medical test or treatment
because of cost and 44% said they didn’t go to a doctor when they were sick
or injured and 40% of American said, they fear medical b ills more than a
serious illness. And this ties into of course th e central problem that we have
in our healthcare system and that is the total lack of price transparency. We
have no idea how much anything cost s . Our society demands transparency in
everythi ng we do , but for our healthcare system.

Mark Masselli: Shelley you mentioned earlier that you were going to be a disruptive in a
positive way f orce within healthcare and we have seen some other entities
recently seeking to challenge the unsustainable cost in healthcare and
certainly Amazon, Berkshire Hathaway and JPMorgan Chase come to mind
and they have announce d that it would be led by Atul Gawande . T alk to us a
little bit more of what it’s going to take to establish th e significant foothold in
such a we ll - established industry as the for - profit pharmaceutical ecosystem.

Shelley Lyford: Y ou mentioned that Amazon, Berkshire Hathaway and JPMorgan Chase
venture, I am so delighted that the public sector is stepping up to create new
models of disrupt ive care an d I am absolutely certain under the leadership of
Atul Gawande, who is a good friend and a mentor to me that they will be
rolling out a very exciting and strategic plan to address healthcare cost for
the 1.1 million individuals that they are going to start working with.

So given the unique mission of Civica Rx, the Gary and Mary West Foundation
is looking forward to supporting and safeguarding that by companies
nonprofit status, that in and of itself, Mark is very disruptive. The three
foundations are going to sit on the governing board and help guide Civica Rx
to ensure that the activities stay true to its mission. We are going to assure
supply and low cost. Again no members are doing to derive any economic
benefit from this company. T he foundation expects that Civica Rx significantly
improved the availability and affordability of generic drugs beginning for 14
hospital s administer generic drugs which are currently high priced and in
short supply.

Margaret Flinter: Shelley, I know that you have said that the FDA is onboard with this
initiative so that you will be operating and in business by next year. But tell
me what it means for the FDA to be onboard, did you have to go through
regulatory hurdles beyond just the standards for producing drugs. This can’t
be seen as good news by everybody in the country, it seem like its good news

Shelley Lyford

for consumers but I am really curious what role does the FDA play in this.

Shelley Lyford: It’s so exciting that we already proved our membership have over 500 U.S.
th
hospitals repres ented and that’s about a 10 of all hospitals in the country.
We also have an excellent management team in place. Mr. Martin Van
Trieste is, who is the former Chief Quality Officer for Amgen has been named
CEO of Civica Rx and he has agreed to take this v ery important position
without getting paid, because he is so vested in the mission and believe s so
much in the company. So the leader of the FDA, Scott Gottlieb does believe in
the mission of Civica Rx and has been on record of saying that we must lower
h ealthcare cost and the price of drugs in United States. And in fact, he stated
that it is incumbent upon the government to do so. T he FDA is aware of the
company’s operation. And then we just think about the high cost of
healthcare in America and in the ex p e nse of medications, this is putting an
amazing burden on American businesses and also on family budgets . F amilies
sitting around kitchen tables, discussing and debating and making the hard
choices about what families are going to pay for, food or their m edications. I
am so delighted that we have got operations and that the public sector is
coming together for the for - profit sector as well as the nonprofit sector like
the Amazon, Berkshire Group and the Civica Rx Group to create new
disrupted models of car e that will assure we have affordability in America.
We need Congress and the White House to step up to the play and do more
to combat the high prices of drugs.

The Gary and Mary West Foundation believes in three commonsense reforms
that need to happen to address the skyrocketing cost of healthcare. The first
is to allow Medicare to directly negotiate with prescription drug companies
to lower prices. The second , we must accelerate to move from fee - for - service
to value - based care a nd we are starting to see t hat shift with the creation of
accountable care organizations. And then finally we must increase price
transparency, we have to arm our patients and consumers with knowledge,
so they can make more informed decisions when they are in a doctor’s office.

Mark Masselli: We are speaking today with Shelley Lyford, President and CEO of the Gary
and Mary West Foundation dedicated to lowering healthcare cost and
improving the quality of healthcare services and outcomes for America’s
seniors . Shelley you are joined b y some great partners, we know one is
Intermountain Healthcare and we just had Dr. Sorenson the CEO of Emeritus
Intermountain on the show. One of the goals as you have laid out of Civica Rx
to put the price gougers on n otice, how do you expect this venture to create
a more robust and competitive drug ging device market across the industry.

Shelley Lyford: S ince we have announced the launch ed of Civica Rx, we have had a massive
amount of interest in the company. We are going to be able to begin our
operations in the very beginning of 2019. W e believe that Civica Rx is of f to a
great start and will make an immediate and lasting impact . I have to say that
on the day of our announcement, the Investor’s Business Daily report that
generic stocks collectively lost 3 %. Our announcement literary moved the

Shelley Lyford

market. It’s pretty amazing, Margaret and I just think it speaks volumes, we
are in an environment right now that is r ipe for c hange and we are showing
the courage, we are pioneering, we are putting forth a different disruptive
model and we are here to shake things up for the benefit of patients. They
should not have to shoulder the burden.

Margaret Flinter: Shelley I know that you are concerned with a whole range of issues
for seniors even beyond the medication issue. And I want to you while we
still have a few moments, I just want to give you a chance to expand a little
bit on the work you are doing at the foundation. We recently had CareMore
Health, CEO Sachin Jain on the show and he was talking about the approach
of CareMore Health has taken to addressing issues that we didn’t always
have as front and center of our awareness. And I understand that this is
something your organization is also developing an approach to do. T ell us a
little bit about those while we have a few moments .

Shelley Lyford: Well CareMore is a terrific organization and Sachin is a great leader and I am
so p leased that he was here speaking about his model a nd also talking a little
bit more about the social determinants of care. That is something t hat is very
important to the Gary and Mary West Foundation, as it is based in San Diego .
I n the state of California, 1000 individuals every day turn 65. By 2035, there
will be more folks over the age of 65 and children under the age of 18 in our
country. A nd currently healthcare consumes about 20% of our GDP. We are
on an unsustainable trajectory. I t is time for us to create models of care that
are sustainable, that are efficient and that are low cost. And so we are doing
this through a variety of different means, to assure that our country will be
ready to take care of our parent s, our grandparents and yes even ourselves.

S o some of those programs include c reating Geriatric Emergency
Departments, Geriatric emergency medicine is very important to the West
Fo undation and to that end we have created the first of its kind, Geriatric
Emergency Department at UC San Diego Healthcare System. We provided a
grand about $12 million to launch that new model of care that will be
replicated throughout our state. We also c reated the very first of its kind in
the nation, Senior Dental Center . W hen they turn 65 and are eligible for
Medicare, they do not have a dental benefit. We have a massive public health
crisis with respect to oral health in our country for seniors and we are
addressing this by making dental care affordable and accessible by p lacing
state of the art dental centers within senior center.

We are also extending efforts in PACE a program for All - inclusive C are for the
E lderly. W e are excited about launching that in the spring and having kind of
this PACE 2.0 model that leverages Telehealth and is able to reach more
patients. O f course looking at the social determinants of care, we are very
proud of the work we do with M eals on W heels of America, during research
p rojects with Meals on Wheels that involves the VA and assuring that the
veterans are properly cared for in their senior ye a rs.

Mark Masselli: We have been speaking today with Shelley Lyford, President and CEO of the

Shelley Lyford

Gary and Mary West Foundation , n ow a par tner in Civica Rx, a not - for - profit
generic drug manufacturing and distribution chain, seeking to disrupt the
generic drug market. You can learn more about their work by going to
www.westhealth.org or follow them o n Twitter @ WestHealth you can also
follow this new venture on Twitter @CivicaRx . Shelley, thank you for the
great work the foundation i s doing and this inspired new initiative that you
have underway and for joining us on Conversations on Healthcare, today.

Shelley Lyford: Thank you Mark, thank you Margaret.

[Music]

Mark Masselli: At Conversations on Healthcare, we want our audience to be truly in the
know when it comes to the facts about healthcare reform and policy, Lori
Robertson is an award - winning journ alist and Managing Editor of
FactCheck.org, a non - partisan, nonprofit consumer advocate for voters that
aim to reduce the level of deception in U.S. politics. Lori, what have you got
for us this week?

Lori Robertson: Former President Barack Obama claims th at Republicans “sabotage of
the Affordable Care Act has already cost more than $3 million Americans
their health insurance. ” That’s according to one estimate but another found
no significant change in the rate or the number of the uninsured from 2016
t o 20 17. Obama cherry picks the higher figure that more strongly supported
his point. And since he made his remarks in early September, another
estimate from the Census Bureau was released, showing the percentage of
Americans who were uninsured for all of 2017 wasn’t statistically different
from 2016.

There are several differences in the methods that may explain from the
discrepancy. The Gallup - Sharecare Well - Being Index backs up Obama. Survey
found that the percentage of U.S. adults who were uninsured ro se from
10.9% in the fourth quarter of 2016 to 12.2% in the fourth quarter of 2017.
That’s an increase of an estimated 3.2 million people. But another measure
from the Center for Disease Control and Prevention estimates that 29.3
million people were uninsured dur ing 2017 a n increase of 700,000 people
from 2016.

The Gallup - Sharecare figures were for the fourth quarters of 2016 and 2017
and the NHIS figures come from surveys conducted throughout the year.
After Obama made his remarks, the U.S. Census Bureau released its
estimates . I t measures the percentage of Americans of all ages, who were
without health insurance for the entire year. The Census also measures the
uninsured at the time of interview and similar to NHIS , t he Census found an
increase in that number of 715,000. And the nonpartisan, Congressional
Budget Office estimates it’s the illumination of the individual mandate
penalty next year that will cause a significant decrease in the number of
people without health insurance, 4 million people will lose their job coverage
in 2019. And that’s my factcheck for this week, I am Lori Robertson,

Shelley Lyford

Managing Editor of FactChecks.org.

Margaret Flinter: FactCheck.org is committed to factual accuracy from the country’s
major political players and is a project of the Annenbe rg Public Policy Center
at the University of Pennsylvania. If you have a fact that you would like
checked, email us at www.chcradio.com , we will have FactCheck.org’s Lori
Robertson, check it out for you, here on Conv ersations on Healthcare.

[Music]

M ar garet Flinter : Each week C onversations highlights a bright idea about how to make
wellness a part of our communities and everyday lives. Louisville, Kentucky
has consistently been on a top 20 list of U.S. Cities you don’ t want to live in, if
you have a lung disorder, surrounded by the nation’s leading rubber
manufacturing entities and nestled in the Ohio River Valley, this is a city that
has grappled with pollution. Several years ago this city ’ s newly hired, Chief of
Inno vation, made a decision to tackle the issue.

Male: I wondered if there was something we might be able to do new and different,
maybe the risk is concentrated in certain places. And the fact we are true,
maybe there would be something we could do about it a nd reduce the
burden.

Margaret Flinter: And through his work in public health research, Ted Smith had
learned of a tech - enabled smart inhaler that w h en sync ed to a person’s
phone, Iike a GPS for whenever that person needed to use their rescue
inhalers.

Ted Smith : Essentially to put a GPS transponder on top of your inhaled medication so
that when you took a p uff of your medication it would take a snapshot of
what time it was and where you were .

Margaret Flinter: Smith dub bed the program, Air Louisville and t racked 1,100
participants over the course of a year. He said they were able to chart
environmental triggers in any given area where an asthma attack occurred
and chart data on the conditions and the location giving them some great
public health epidemiolog y data.

Ted Smith : And then that let us to explore where those little micro areas are that are
problematic and what we might be able to do about it.

Margaret Flinter: More importantly, the smart inhalers gave users a feedback loop of
information which allo wed them to better manage their exposure to known
asthma triggers.

Ted Smith : The feedback loops to the user and there is an immediate effect, people end
up getting better control of their respiratory disease.

Margaret Flinter: Reliance on emergency inhale rs dropped 78% among participants.

Ted Smith : We have the harder problem that I think the rest of the country has, which is

Shelley Lyford

our ambient air quality standards are still not low enough. And people are
exposed to levels of pollution that we are going to have to work hard to
figure out how to remove.

Margaret Flinter: A tech - enabled smart inhaler that gathers meaningful data that
informs public health officials, how they might reduce the burden of asthma,
health class, while teaching asthma suffer er s to better control their disease
and stay healthier , n ow that’s a bright idea.

[Music]

Mark Masselli: You have been listening to Conversations on Healthcare, I am Mark Masselli.

Margaret Flinter: I am Margaret Flinter.

Mark Masselli: Peace and health.

Moderator: Conv ersations on Healthcare is recorded at WESU at Wesleyan University,
streaming live at www. chcradio.com , iTunes or wh er ever you listen to
podcast. If you have comments please email us at [email protected]
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