FARGO — Sanford Health has received its first shipment of drugs from a consortium it co-founded to help hospitals maintain reliable supplies of medicine in the face of recurring drug shortages.

The shipment was the first for Civica Rx, a collaboration involving over three philanthropists and 45 health systems representing more than 1,200 hospitals in 46 states.

Last year, Sanford was one of three founding members of Civica Rx, a nonprofit that works to ensure reliable supplies of important drugs that are costly and sometimes risky to replace.

Jesse Breidenbach, Sanford’s senior director of pharmacy, said patients will benefit by gaining access to drugs that are more affordable than the premium prices that hospitals must pay for medications in short supply. The nonprofit will help to avoid drug substitutions that might not work as well or can result in dosage errors.

“It helps us stabilize our cost of medication,” Breidenbach said. During acute shortages, he added, drug prices can skyrocket by 100%, 300% or even 500%.

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Sanford’s first drug shipment was vancomycin, an “essential” antibiotic hospitals use to treat serious infections caused by bacteria that are resistant to other antibiotics — examples include pneumonia, cellulitis, septicemia, osteomyelitis and endocarditis.

Vancomycin often is in short supply. The last time it was in dire shortage was in 2018, when Sanford’s cost soared 85%. During periods of ample supply, vancomycin prices are stable, but they can spike abruptly when shortages hit.

Using the stable supplies enabled by Civica Rx, Sanford achieves annual savings of $300,000 systemwide, including $150,000 in its Fargo region.

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Last year, Sanford administered more than 71,226 doses of vancomycin.

Maintaining a sustainable supply of medicines allows doctors to prescribe medications that they are familiar with. Finding substitutions cause administrative headaches and often requires educating doctors and nurses about the change, Breidenbach said.

“These medications are much more affordable than the alternatives that are out there, so it does continue to lower costs,” he said.

Separately, the Blue Cross Blue Shield Association announced that it has joined with 18 locally operated Blue Cross Blue Shield insurance companies and Civica Rx to form a new subsidiary dedicated to lowering the cost of generic drugs.

The Blue Cross Blue Shield partners are investing $55 million in the effort and are inviting other health insurers, employers, pharmacies and others to join the initiative, which plans to produce generic insulin in response to the high prices that cause hardships for patients.

Blue Cross Blue Shield of North Dakota and Blue Cross Blue Shield of Minnesota are not among the insurers forming the subsidiary with Civica Rx.

"We are continually looking for ways to reduce the cost of prescription drugs for our members," said Andrea Dineen, a spokesperson for Blue Cross Blue Shield of North Dakota. "However, after evaluating this partnership and understanding the initial investment required, we determined it was not the best use of our members' dollars at this point in time."

Although deciding "we did not want to take on the risk that comes with this kind of joint venture at this time," the North Dakota Blues said they will "continue to work with our pharmacy benefit manager to ensure we are bringing the best possible pricing and access to prescription drugs to our members."

A spokesman for Blue Cross Blue Shield of Minnesota didn't offer any comment beyond confirming that the company was not involved in the generic drug initiative "at this time."

Civica Rx has 17 other generic drugs in development, including medications to manage surgical patients��� pain for procedures such as knee and hip replacements as well as heparin, a blood-thinner, and steroids given to cancer patients before chemotherapy.

“The goal is to make generic medicines accessible and affordable,” said Dr. Joshua Crabtree, vice president of Sanford Clinic in Sioux Falls, S.D. “Sanford Health’s membership will help ensure our locations can continue to provide vital medications for our patients.”

Medications supplied by Civica Rx will be available to patients at Sanford’s medical centers in Fargo, Bismarck, Sioux Falls and Bemidji, Minn.

To provide stable drug supplies, Civica Rx member hospitals commit to ordering up to 50% of their supplies for certain drugs from the nonprofit. That provides certainty for the drug manufacturers the consortium works with, enabling a steady supply of medicines with predictable costs.

Ninety percent of hospitals belonging to Civica Rx have had to find alternative treatments due to drug shortages and price increases. A recent survey cited by Civica found that drug shortages cost hospitals almost $360 million annually in labor expenses, with another $230 million spent annually buying more expensive alternatives.