Hospitals Prepare To Launch Their Own Drug Company To Fight High Prices And Shortages

////Hospitals Prepare To Launch Their Own Drug Company To Fight High Prices And Shortages

Hospitals Prepare To Launch Their Own Drug Company To Fight High Prices And Shortages

Sometimes IV bags are hard for hospitals to come by. Other times it’s injectable folic acid to treat anemias. Right now, the tissue-numbing agent lidocaine is in short supply. Shortages of commonplace generic drugs have plagued hospitals in recent years. And with short supplies and fewer suppliers for key drugs, there have been price increases.

Hospital purchasing agents keep searching for new sources for the medications that patients need, while clinicians scramble to find alternatives. “Every day at Intermountain we manage more than 100 drug shortages, and most of them are generics,” said Dr. Marc Harrison, president and CEO of Intermountain Healthcare, a system of 22 hospitals based in Salt Lake City. “The impact on patient care, in terms of trying to find alternatives and scurrying around and trying to find necessary drugs, is incredibly time-consuming and disconcerting.”

Now Intermountain, along with several other major hospital systems and philanthropies, is taking the problem in hand. They are launching a nonprofit, generic drug company to help fight rising costs and chronic shortages. The company, called Civica Rx, will be independent. But the board will include so-called governing members that include Intermountain, the Mayo Clinic, and for-profit HCA Healthcare, among others. The companies are unveiling the new venture’s name, structure and leadership on Thursday. The intention to start it was announced in January.

The new company plans to market 14 common generic drugs that have been in short supply and whose prices have risen in recent years. Harrison declined to name the drugs.  “As we decided on the drugs we were really practical,” Harrison said in an interview. “We looked for drugs that were now in short supply. We looked for drugs that were on the lists of essential medications, and we looked for drugs that have had huge spikes in their prices.”

Drug shortages have become so widespread that Food and Drug Administration Commissioner Scott Gottlieb in July created a task force to come up with solutions. And last year the Justice Department, along with 45 states, accused a group of generic drug makers of price fixing. David Mitchell, founder of the advocacy group Patients for Affordable Drugs, says the nonprofit idea is good, but the impact will depend on which drugs the new venture decides to make. “If they take on very expensive drugs for rare diseases and for which there is no competition … that’s good. If it is to compete where there is already competition and lower prices, that’s not as good,” he said.

Civica Rx will begin applying to the FDA as soon as early 2019 to make and sell the new generics, Harrison said. And the company will likely start out by contracting with existing manufacturers to make the medications under its label. Eventually though, it could buy manufacturing facilities of its own.

Read more at NPR