The Mercury (Pottstown, PA)

Groups make own drugs to fight high drug prices, shortages

- By Linda A. Johnson

Impatient with years of inaction in Washington on prescripti­on drug costs, U.S. hospital groups, startups and nonprofits have started making their own medicines in a bid to combat stubbornly high prices and persistent shortages of drugs with little competitio­n.

The efforts are at varying stages, but some have already made and shipped millions of doses. Nearly half of U.S. hospitals have gotten some drugs from the projects and more medicines should be in retail pharmacies within the next year as the work accelerate­s.

Most groups are working on generics, while at least one is trying to develop brand-name drugs. All aim to sell their drugs at prices well below what competitor­s charge.

“These companies are addressing different parts of the problem and trying to come up with novel solutions” to produce cheaper medicines, said Stacie Dusetzina, a Vanderbilt University health policy professor. “People should be able to access the drugs that work for them without going broke.”

While some of the projects are solving supply problems and reducing medication costs for hospitals, drug price experts are split on how much consumers will benefit.

Dusetzina said the efforts could bring needed price competitio­n, at least for some drugs.

Dr. Aaron Kesselheim, a Harvard Medical School researcher and price expert at Brigham & Women’s Hospital in Boston, thinks for some drugs these projects “can lower patients’ out-of-pocket costs ... absolutely.”

But David Mitchell, founder of the independen­t consumer group Patients for Affordable Drugs, said the projects are workaround­s that help in niches, but are “not enough to fix a broken system.”

Civica Rx was started three years ago by a hospital consortium. It now provides over 50 generic injectable medicines in chronic shortage to more than 1,400 hospital members and the Veterans Affairs and Defense department­s. It already has sold enough medication to treat 17 million people, including many hospitaliz­ed with COVID-19.

Now it’s expanding to help patients directly, said chief executive Martin VanTrieste. Its new partnershi­p with Anthem and Blue Cross health plans, CivicaScri­pt, is picking six or seven expensive generic drugs to start. It will have contract manufactur­er Catalent start producing those drugs to sell at 50,000 retail pharmacies starting in 2023.

Other “alternativ­e drugmakers” include:

—Two enterprise­s, from Premier Inc. and Phlow Corp., focused on providing their hospital members with affordably priced generics that are chronicall­y scarce.

— NP2, which is about to start producing cheaper generic IV cancer medicines.

— EQRx, which is creating brand-name drugs for cancer and inflammato­ry disorders to sell at “radically lower prices” than rival brands.

Walmart recently added insulin to its in-house brand of products for people with diabetes. It’s selling its own version of the mealtime insulin NovoLog, in partnershi­p with manufactur­er Novo Nordisk, for less than half NovoLog’s price.

Even entreprene­ur Mark Cuban has jumped in, giving his name and money to a public-benefit company aiming to provide cheap alternativ­es to high-cost generic drugs at 15% above manufactur­ing costs, no insurance needed.

In January, Mark Cuban Cost Plus Drug Co. launched its first medication, a pill for parasitic worm infections that it sells through independen­t pharmacies for about $40 per two-dose treatment, said founder and CEO Dr. Alex Oshmyansky. The company is building a factory in Dallas but paying other manufactur­ers for now and aims to launch up to 100 more drugs by year’s end.

Vanderbilt’s Dusetzina sees Cuban’s company as best positioned to cut outof-pocket costs.

“It’s a really nice project to go after products where there’s little competitio­n — and price gouging,” she said.

Brand-name drugs get monopolies lasting up to two decades under U.S. patent law, so most of the alternativ­e drugmakers are targeting certain off-patent medicines whose prices have risen dramatical­ly in recent years.

Generics are usually cheap. But as buyers pushed for barely breakeven prices on these drugs over the last couple decades, generic manufactur­ers consolidat­ed. With fewer factories making certain generics, even temporary plant closures triggered lasting shortages. And the reduced competitio­n led to big price hikes, often forcing doctors to try costlier, less-effective alternativ­es and hospital pharmacist­s to spend long hours seeking alternativ­es for drugs in shortage.

Those years-long shortages spurred Civica’s formation. It also led a top hospital group purchasing organizati­on, Premier Inc., to launch a program that has contractor­s making more than 60 products for about 850 member hospitals, said its chief pharmacy officer, Jessica Daley. The two groups say they’ve gotten numerous drugs off national shortage lists.

Phlow Corp., a public benefit drug manufactur­er largely funded by government grants, partnered in March with 11 top children’s hospitals to address shortages by making generic medicines in childsize doses for cancer and other life-threatenin­g conditions. Phlow and Civica are building neighborin­g factories in Petersburg, Virginia.

Such efforts have been helping hospitals stock crucial drugs — sedatives, painkiller­s, antibiotic­s and respirator­y medicines — needed for COVID-19 patients.

The alternativ­e drugmakers are hiring U.S. contract manufactur­ers whenever possible and getting drug ingredient­s here or in Europe, to diversify supply chains heavily reliant on China and India, which limited exports of drugs and ingredient­s early in the pandemic. The Biden administra­tion also is working to increase domestic production of essential generic drugs.

Harvard’s Kesselheim foresees the new generic manufactur­ers helping to boost supply and lower prices, but he thinks developing new brand-name drugs — as EQRx is trying to do — is tougher.

 ?? PAUL BACCI - CIVICA RX ?? This July 21photo provided by Civica Rx shows constructi­on of their Essential Medicines Manufactur­ing Facility in Petersburg, Va. Civica Rx was started three years ago by a hospital consortium. It now provides over 50 generic injectable medicines in chronic shortage to more than 1,400hospita­l members and the Veterans Affairs and Defense department­s.
PAUL BACCI - CIVICA RX This July 21photo provided by Civica Rx shows constructi­on of their Essential Medicines Manufactur­ing Facility in Petersburg, Va. Civica Rx was started three years ago by a hospital consortium. It now provides over 50 generic injectable medicines in chronic shortage to more than 1,400hospita­l members and the Veterans Affairs and Defense department­s.

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