Hospitals Find An Enterprising New Way To Combat High Drug Prices And Shortages

Some of the most common medications are the hardest for doctors to get their hands on. In the past several years, shortages of commonplace generic drugs have become routine, according to NPR. Medications like IV bags, folic acids, and lidocaine can be just as hard to find as expensive super-drugs. And as the supply for these products lessens, the prices go up.

In an effort to provide better, more affordable care, the doctors at "several major hospital systems," including Intermountain, are teaming up to create their own "nonprofit, generic drug company."


The hospitals involved with "Civica Rx," which include "Intermountain, the Mayo Clinic, and for-profit HCA Healthcare," announced they'd be starting the venture together in January 2018, and unveiled the new company's name and leadership team on Thursday, September 6.

Dr. Marc Harrison, president and CEO of Intermountain Healthcare, commented on the need for change:

Every day at Intermountain we manage more than 100 drug shortages, and most of them are generics. 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.

Though the exact offerings of the new company haven't been revealed yet, Harrison commented that the team of hospitals carefully cultivated a roster of 14 much-needed medications:

As we decided on the drugs we were really practical. 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.


David Mitchell, founder of the advocacy group Patients for Affordable Drugs, says which drugs Civica Rx is selling will make a huge impact on its usefulness:

If they take on very expensive drugs for rare diseases and for which there is no competition ... that's good. If it is to compete where there is already competition and lower prices, that's not as good.

Dan Liljenquist, senior vice president and chief strategy officer at Intermountain, says that generic drugs' inflated prices are largely the result of companies maintaining their monopolies over "essential" medications. In his words, an established company will drastically lower its prices to eliminate any new competitors, then raise them again as soon as they are the only option left to doctors:

They can lower their prices until that new competitor leaves and then raise it back up again.

To try and sidestep this trend, Civica Rx will plan on entering into long-term contracts with its clients, ensuring hospitals will pay the same price for the medicine no matter what other generic companies are doing. In some cases, hospitals may have to pay slightly more as well-established companies try to drive away competitors but, in other cases, prices may stay low as those same companies try to turn a dramatic profit.

That stability is so appealing that 120 health care companies have already contacted Civica Rx with interest in purchasing medication from the new company. Harrison has a warning for the many medicine companies who have been artificially inflating prices at the cost of people's health:

The folks who are gouging people and creating shortages, they know who they are. And they're the ones who should be very concerned.

Twitter users hope Civica Rx is able to go the distance.




H/T - NPR, Forbes

You May Also Like
Hi friend— subscribe to my mailing list to get inbox updates of news, funnies, and sweepstakes.
—George Takei