Not-for-profit hospitals coming up with their own generic medicines to combat shortages

By Dr. Ananya Mandal, MDJan 18 2018

Many of the major not-for-profit hospital groups have tried their hand an manufacturing and making generics to combat the shortages of medicines as well as the high costs of branded medications. This move bypasses the monopoly held by the pharmaceutical companies.

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There have been years of medicine shortages, say the experts along with steep rises in prices. Generic injections especially have been unavailable for use and cost much more than are affordable. These drugs were cheap at one point in time say experts and most hospitals rely on these injections for their routine working. Working with medicine shortages and expensive medications means that the staff needs to find alternatives and the patients may not be getting the optimal therapy that they need.

The hospital groups, announced yesterday (18th of January 2018) that they would be launching a not-for-profit drug company. Hospital groups that are joining hands in this venture include Intermountain Health, Ascension and two Catholic health systems, Trinity Health and SSM Health and VA health system. These groups include over 450 hospitals that form around a tenth of all hospitals in the US. These groups also own several nursing homes, doctors’ offices, clinics and hospices, home cares and other medical facilities. They also own an insurance plan. Other health systems would join this movement shortly, expert the experts.

The noble aims of this venture is to beat the pharmaceutical generic makers in their own game and prevent drug shortages and rising prices of drugs such as heart drugs, antibiotics and morphine among other essential medications.

Intermountain Healthcare CEO Dr. Marc Harrison said in a statement that this was an “ambitious plan”, but went on to say that these health care systems “are in the best position to fix the problems in the generic drug market. We witness, on a daily basis, how shortages of essential generic medication or egregious cost increases for those same drugs affect our patients.” These generic drugs can be made inexpensively and this would save hundreds of millions of dollars annually.

According to Laura Kaiser, president and CEO of SSM Health, all Americans deserved “high-quality, affordable care.” She added that, “The best way to control the rising cost of health care in the U.S. is for payers, providers and pharmaceutical companies to work together and share responsibility in making care affordable.  Until that time, initiatives such as this will foster our ability to protect patients from drug shortages and price increases that limit their ability to access the care they need.” Anthony R. Tersigni, EdD, FACHE, president and CEO of Ascension, also added along the same lines that this would increase the “availability and affordability of critically needed medications for millions of Americans”. Richard J. Gilfillan, MD, CEO of Trinity Health said that there was a “dangerous gap” between the “demand and supply of affordable prescription drugs”. Carolyn M. Clancy, MD, executive in charge, Veterans Health Administration added that this new company would provide a “affordable and stable supply of generic pharmaceuticals,” and was looking forward to this.

The new company seeks to either utilize the services of an existing company for manufacture, or get approval from the Food and Drug Administration (FDA) to make the drugs themselves. There would be a group of high-profile experts from government, Harvard Business School and the pharmaceutical industry forming an advisory board who would guide the company. As of now the advisory board includes Madhu Balachandran, retired executive vice president of Global Operations, Amgen, Don Berwick, MD, president emeritus and senior fellow, Institute for Healthcare Improvement; former CMS administrator, Clayton Christensen, professor at the Harvard Business School and founder of Innosight, Bob Kerrey, managing director, Allen & Company; former Nebraska governor, U.S. senator, and pharmacist, Martin VanTrieste, retired senior vice president and chief quality officer, Amgen and other leaders including former governor and senator from Nebraska.

Reference: https://intermountainhealthcare.org/news/2018/01/leading-us-health-systems-announce-plans-to-develop-a-not-for-profit-generic-drug-company/