Hospitals to form own pharma
Here’s a new prescription to deal with cost of drugs
Tired of paying high prices for common drugs and still facing shortages, a group of hospitals across the country say it is teaming up to do the unprecedented: form its own pharmaceutical company.
The effort has attracted the support of five health systems, representing more than 450 hospitals nationwide. No Colorado hospitals have announced that they are joining the plan, though some say they are watching its development with interest.
“We are closely monitoring that and keeping an eye on it,” said Jennifer Wills, a spokeswoman for Centura Health, which operates hospitals in Colorado and Kansas.
The new not-for-profit company will focus on producing generic versions of drugs — which, though they should be far cheaper than their brand-name equivalents, can still see big price fluctuations and be hard to find. The company must receive FDA approval, and the precise details of its structure are still being worked out. Its formation was announced last month.
“It’s an ambitious plan,” Dr. Marc Harrison, the CEO of Salt Lake City-based hospital system Intermountain Healthcare, which is leading the effort, said in a statement. “but health care systems are in the best position to fix the problems in the generic drug market.”
Joining Intermountain in forming the new company will be Ascension and SSM Health, both based in Missouri, and Michiganbased Trinity Health. The group says it is also working “in consultation” with the U.S. Department of Veterans Affairs, though the VA has made no financial commitment.
Drug prices are a frequent source of concern and complaint for both hospitals and patients.
Two years ago, EpiPen price spikes caused stress for parents of kids with severe allergies. A surge in the price of insulin led some patients to ration their supplies, with deadly consequences.
Driven by gains in insurance coverage after the implementation of the Affordable Care Act, the percentage of Coloradans who said they skipped filling a prescription because of cost hit its lowest level in at least six years in 2015, according to a statewide Colorado Health Institute survey. But the percentage climbed in the 2017 survey, to 10.8 percent.
Still, large Colorado hospital systems contacted by The Denver Post said they were taking a waitand-see approach on the new drug company. In addition to Centura, representatives from UCHealth and HealthOne both said their companies are not involved in the project — at least
not so far.
Leaders of the original five health systems forming the new company say they expect more hospitals to join them soon. And, even if obstacles land in their path, they say they are committed to going forward with the idea.
“For people in the United States, there is a dangerous gap today between the demand and supply of affordable prescription drugs,” Dr. Richard Gilfillan, the CEO of Trinity Health, said in a statement. “If the only way to provide our communities with affordable drugs is to produce them ourselves, then that is what we will do.”