Hospitals Launch Their Own Generic Drug Company

A consortium of four healthcare groups, citing frustration with ongoing shortages and high costs of generic medications, announced on Jan. 18, 2018 the formation of a not-for-profit generic drug company. The healthcare groups, Ascension, Intermountain Healthcare, SSM Health, and Trinity Health—working in consultation with the US Department of Veterans Affairs (VA)—represent more than 450 hospitals in the US. The new company plans to be an FDA-approved manufacturer or will sub-contract manufacturing to contract manufacturing organizations and intends to provide patients “an affordable alternative to products from generic drug companies whose capricious and unfair pricing practices are damaging the generic drug market and hurting consumers,” according to a joint press statement. Other goals of the new venture are to stabilize the supply of essential generic medications used in hospitals, many of which have been subject to chronic shortages, make drugs more affordable, and bring competition to the market for generic drugs. The founding members report that other health systems will soon join the initiative.