Faced with shortages of essential drugs and rising prices, some hospital systems are taking a revolutionary and proactive approach. They are beginning to manufacture their own generic versions of popular prescription medications, ensuring that patients always have access to the drugs they need.
According to Dr. Marc Harrison, chief executive of Intermountain Healthcare, the aim is to “try and fix” the problems with the medical drug business in the United States. Intermountain Healthcare plans to manufacture certain drugs and provide them at low prices to hospitals.
For many years, hospitals have experienced shortages of morphine and other drugs. They also struggle to cope with sudden price rises for off-patent products such as Nitropress, which is a heart medicine. These price rises, which often occur due to investors manipulating the generic drug market, leading to patients struggling to afford the medicines they rely on.
As an example, hospital directors often point to the case of Daraprim. This decades-old drug is used to treat a life-threatening parasite infection. When a former hedge fund manager, Martin Shkreli, took over the company that makes this drug, he quickly raised the cost of a single tablet from $13.50 to $750.
Buying up old drugs and dramatically raising their prices has become a way for big companies to make a lot of money. This practice has sparked public outrage and Congressional attention, but in many cases there is nothing to stop companies from profiteering in this way.
Generic drugs that are manufactured by only one or two companies are most vulnerable to shortages and sudden price rises. Hospitals hope that by manufacturing their own generic medicines, they can reduce their vulnerability to interruptions in supply.
Hospital groups intend to join together to set up a new company, which will manufacture generic medicines and sell them. At first, the company will only sell to hospitals, but the long-term plan is to offer low-cost generics more broadly.
According to drug shortage expert Erin Fox, the idea is promising. “Anything that increases the number of suppliers will help,” she says.