To help patients by addressing the often unwarranted shortages and high costs of lifesaving generic medications, Intermountain Healthcare is leading a collaboration with Ascension, SSM Health and Trinity Health, in consultation with the U.S. Department of Veterans Affairs* (VA), to form a new, not-for-profit generic drug company. The five organizations represent more than 450 hospitals around the U.S. Other health systems will soon be joining this not-for-profit initiative, which will make essential generic medications more available and more affordable, bringing healthy competition to the market for generic drugs.
The new company intends to be an FDA approved manufacturer and will either directly manufacture generic drugs or sub-contract manufacturing to reputable contract manufacturing organizations, providing patients an affordable alternative to products from generic drug companies whose capricious and unfair pricing practices are damaging the generic drug market and hurting consumers. The company will also seek to stabilize the supply of essential generic medications administered in hospitals, many of which have fallen into chronic shortage. The new initiative will result in lower costs and more predictable supplies of essential generic medicines, helping ensure that patients and their needs come first in the generic drug marketplace.
As has been widely reported, certain generic drug manufacturers have been widely criticized for unwarranted and arbitrary price increases, and for creating artificial shortages of vital medications. These activities have resulted in some generic drugs increasing in cost by more than 1,000 percent in just a few months for seemingly no reason. Research into the actual costs of manufacturing and distributing generic drugs suggests that, in many instances, generic drug prices can be reduced to a fraction of their current costs, saving patients, and the healthcare systems that care for them, hundreds of millions of dollars each year.
Many of the well-publicized problems in the U.S. generic drug market can be attributed to a reduction in the number of suppliers, consolidation of production volumes and a concentration of market pricing power. These market factors are particularly problematic with older generic medications that hospitals rely on every day to take care of desperately ill patients. This new initiative will bring together healthcare systems from around the country to help address these generic drug market failures, providing the new not-for-profit generic drug company with plenty of customers ready and eager for its products.
Read more: https://www.businesswire.com/news/home/20180118005320/en/Leading-U.S.-Health-Systems-Announce-Plans-Develop