Hospitals decide to start their own drug company

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Utah's Intermountain Healthcare is at the helm of a collaboration with hospital systems across the country that will manufacture and distribute a selection of generic drugs to fight rising costs.

To pull this off, the health systems will need to create a company that's an FDA-approved manufacturer of certain generic medications that will either make the drugs itself or contract with other manufacturers to make the generic drugs. These activities have resulted in some generic drugs increasing in cost by more than 1,000 percent in just a few months for seemingly no reason.

The new company will provide an alternative to products now made by generic manufacturers "whose capricious and unfair pricing practices are damaging the generic drug market and hurting consumers", according to the joint statement released Thursday morning. Current participants include Ascension, SSM Health, and Trinity Health, which encompass 450 hospitals across the U.S.

Currently, there are around 300 hospitals involved in the group to start the revolution in the drug business, with more hospitals expected to join. "We are confident we can improve the situation for our patients by bringing much needed competition to the generic drug market". Those problems drive up costs for hospitals, require staff time to find scarce drugs or devise alternatives, and sometimes mean patients don't get the best choice.

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"If they all agree to buy enough to sustain this effort, you will have a huge threat to people that are trying to manipulate the generic drug market".

Hospitals are getting into the generic drug business. Some of the drugs falling into shortages, he said, have been around for decades and are necessary for daily hospital care.

"We're only interested in those organizations that are creating shortages and driving drug prices up in an irrational fashion", Harrison said.

Laura Kaiser, president and CEO of SSM Health, stated, "All Americans deserve access to high-quality, affordable care. I'm pleased to see our respective systems come together along with the VA to ensure affordability and access to these essential medications". North-Dakota-based Trinity Health operates 93 hospitals in 22 states. They'll have details of what drugs they're making in 2019. "We'll make sure drugs are available in good quantities and reasonable prices".

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