Hospitals are tired of facing the rising prices and declining availability of products and medications to aid their patients. Shortages of very common generic drugs have plagued hospitals in recent years. And the short supplies keep the prices increasing.
“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.”
Therefore, Intermountain and some other major hospital systems, is taking the problem in house. They are launching a nonprofit, generic drug company to help fight rising costs and chronic shortages.
Civica Rx is the new company name, it 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 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.
About 120 health care companies that represent about a third of U.S. hospitals have contacted the organizers of Civica Rx to ask about getting in on the deal, Harrison said.
He said unscrupulous generic drug companies should be on guard.
“There are a lot of very principled generic drug makers out there and who sell drugs at reasonable prices and make them in adequate supplies,” Harrison said. “They have nothing to worry about. They’re friends. They’re good colleagues. But the less principled companies should take notice.
“The folks who are gouging people and creating shortages, they know who they are,” he said. “And they’re the ones who should be very concerned.”
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