Fed-Up By Big-Pharma Greed, Hospital Systems Will Now Produce Drugs

Intermountain Medical Center.An Errant Knight/Wikimedia Commons/CC BY-SA 4.0

A group of 300 major hospitals will form a nonprofit to supply their own drugs to counter price rises and shortages.

Skyrocketing drug prices and increases in drug shortages have driven some of America's largest hospital systems to enter the pharmaceutical business themselves, in a move that would see several major players offering generic drugs.

“This is a shot across the bow of the bad guys,” said Dr. Marc Harrison, the chief executive of Intermountain Healthcare, the nonprofit Salt Lake City hospital group that is spearheading the effort. “We are not going to lay down. We are going to go ahead and try and fix it.”

So far about 300 hospitals have signed on to a plan that would form a new nonprofit company which would in turn provide drugs to the hospitals.

While Intermountain executives would not name the drugs they intend to make, hospitals have long experienced shortages of drugs like morphine or encountered sudden price increases for old, off-patent products like the heart medicine Nitropress. Hospitals have also come under criticism for overcharging for their services, including for some drugs.

The goal is to address both shortages and prices in a way that doesn't take on the entire pharmaceutical industry but will strike a blow to those companies who hold off-patent drugs hostage and jack up prices.

“We’re seeing an acceleration of both shortages and escalation of prices,” said Dr. Richard Gilfillan, the chief executive of Trinity Health, a large Catholic system that operates in nearly two dozen states and is part of the group. “There’s not been any effective push back on either of these.”