Consumers may soon see savings on generic prescription drugs from outpatient pharmacies thanks to a new partnership between Civica Rx and Blue Cross Blue Shield. They have announced plans to launch a new nonprofit drug company with the goal of lowering prescription drug costs for consumers.

Civica Rx is a not-for-profit drug company formed in 2018 by Intermountain Healthcare and several other health systems and philanthropies to provide low-cost generic drugs for use in hospitals. Civica now represents more than 1,200 U.S. hospitals—including Intermountain’s 23 hospitals—that are already benefitting from lower cost drugs including antibiotics once in short supply. The new company will be a subsidiary of Civica Rx and will provide medication for outpatients.

“Civica is already bringing value—in quality, supply, and price—to the inpatient hospital market and with Blue Cross Blue Shield will expand that mission to reach individuals and families buying generic prescriptions in hospitals and pharmacies,” said Dan Liljenquist, Intermountain’s senior vice president and chief strategy officer and Civica board chairman. “Combining Civica’s mission with the commitment Blue Cross Blue Shield companies show to their members places us in a position to make a significant impact on lowering drug costs.”

“Civica’s mission is to make quality medicines available and affordable to everyone,” said Martin VanTrieste, Civica president and CEO. “Serving patients is our privilege and our responsibility—one that we’re proud to share with Blue Cross Blue Shield companies who are committed to tackling one of the most important healthcare challenges of our time. Numerous studies confirm that medication costs can dictate whether individuals fill or ration their generic prescriptions. Together with Blue Cross Blue Shield companies, we’re taking action to put patients first.”

The Blue Cross Blue Shield Association, a Chicago-based national trade group that represents some of the nation's biggest health insurance companies, says 18 Blue Cross Blue Shield companies will spend $55 million to create the new Civica Rx subsidiary to “acquire and develop abbreviated new drug applications for select generic drugs.” The group plans to have its first generic medicines available by early 2022. They haven't yet announced which drugs they plan to release first.

Leaders from Blue Cross Blue Shield, which provides insurance coverage to tens of millions of Americans, say they hope this move will help them reign in soaring drug prices for their members.

“We’re looking for innovative solutions in the market to shake up the status quo and make pharmaceuticals more affordable,” Blue Cross Blue Shield Association chief strategy and innovation officer Maureen Sullivan said in an interview with Forbes.

Those involved say they’re expecting other health plans and employers to back the new company and talks are underway with multiple potential partners.