Hospitals launch drug company to combat shortages

Henrietta Strickland
September 9, 2018

Right now, the tissue-numbing agent lidocaine is in short supply.

Drug shortages have been widespread for more than a decade, particularly for cheap generic drugs, due to manufacturers consolidating, stopping production of low-profit medicines and having to fix manufacturing problems. The cost isn't just the price of a drug, but the clinical and staff time spent tracking the supply, looking for alternatives and changing protocols. When there's a shortage, hospitals scramble to find other options.

The company's goal is to combat drug shortages and higher drug prices by making generic medications that are more accessible and affordable. They are launching a nonprofit, generic drug company to help fight rising costs and chronic shortages. The company, called Civica Rx, will most likely be honest.

The seven groups are Catholic Health Initiatives, HCA Healthcare, Intermountain Healthcare, Mayo Clinic, Providence St. Joseph Health, SSM Health and Trinity Health.

Several hospital leaders said shortages and price spikes on old drugs are managed on a near-daily basis. The intention to start it was announced in January.

The company has identified 14 drugs administered in hospitals to focus on first. Harrison declined to name the treatment.

"We believe this is wrong", he said.

"We intend to make our prices fully transparent".

In July, the Food and Drug Administration created a task force aimed at curbing drug shortages. And a year ago the Justice Department, along with 45 states, accused a group of generic drug makers of price fixing.

"If they take on very expensive drugs for rare diseases and for which there is no competition. that's good". And the corporate will most likely birth out by contracting with existing producers to plan the medicines below its set up. Eventually though, it could buy manufacturing facilities of its own. That's caused manufacturers to home in on certain generic drugs and discontinue others that don't make as much money.

Civica Rx said that Martin VanTrieste, former chief quality officer for Amgen Inc.

"It only takes one generic company in a market if they are acting without a profit motive to lower the price and make it stable", he said. He says production of some generics has become so concentrated that companies have monopoly power over essential medications. And since they've already covered their manufacturing and vogue costs, they can deliver that vitality to withhold competitors out.

"As has been widely reported, certain generic drug manufacturers have been criticized for unwarranted shortages and insane, arbitrary drug price increases, and creating artificial problems for patients", said Marc Harrison, Intermountain Healthcare's CEO and president. Liljenquist argues that the long-term stability will be more attractive than the short-term temptation of getting a deal. Early indications point out he's correct.

About 120 health care companies that represent about a third of USA hospitals have contacted the organizers of Civica Rx to ask about getting in on the deal, Harrison said. He acknowledged unscrupulous generic drug companies need to tranquil be on guard.

Civica is starting with 14 generic drugs, but organizers won't say which ones until they are ready to sell.

Other reports by Click Lancashire

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