Jan 18, 2018

Hospitals to launch generic drug company

Intermountain Healthcare is taking the lead on starting a new generic drug company. Photo: Intermountain Healthcare

Four not-for-profit hospital systems that own 10% of U.S. hospitals — Intermountain Healthcare, Ascension, SSM Health and Trinity Health — are banding together to create a new generic drug company. The Department of Veterans Affairs also is helping and has expressed interest as a purchaser.

Why it matters: Generic drug makers will have a new competitive threat with this first-of-its-kind hospital venture. Marc Harrison, a doctor and the CEO of Intermountain, said drug shortages and high drug prices spurred this action.

Key quote: "It’s hard to make people better if they don’t have access to the medicines they need," Harrison said in an interview. "To add insult to injury, those medicines are being priced in a way that’s nonsensical."

The details:

  • Executives said for now they aren't disclosing what drugs they will make, fearing generic drug companies would respond by lowering prices now and jacking them up again later.
  • The move is in response to generic drug makers that have raised prices significantly after buying older drugs that lost their patents. Martin Shkreli's price hikes on Daraprim are one of the more infamous examples.
  • "We are not anti-pharma. We only care about the bad guys," Harrison said.
  • The company will be structured as a not-of-profit and still needs FDA and other regulatory approvals.
  • Don't expect the company to build large manufacturing plants. Instead, it likely will contract with existing facilities.
  • A handful of people are advising the new entity, including former Obama administration Medicare and Medicaid chief Don Berwick and Nebraska's former Democratic senator and pharmacist Bob Kerrey.
  • Intermountain was already getting phone calls today from other interested systems.

Context: Generic drug prices have caused a lot of stress for hospitals and patients. But most drug spending is heavily concentrated in branded drugs, not generics. Brand-name drugs account for 72% of drug spending, but only 10% of filled prescriptions.

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Coronavirus dashboard

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  1. Global: Total confirmed cases as of 7:30 p.m. ET: 660,706 — Total deaths: 30,652 — Total recoveries: 139,304.
  2. U.S.: Leads the world in cases. Total confirmed cases as of 7:30 p.m. ET: 121,478 — Total deaths: 2,026 — Total recoveries: 1,072.
  3. Federal government latest: President Trump is considering a quarantine on New York, parts of New Jersey and Connecticut.
  4. State updates: Alaska is latest state to issue a stay-at-home order — New York is trying to nearly triple its hospital capacity in less than a month and has moved its presidential primary to June 23. Some Midwestern swing voters that supported Trump's handling of the virus less than two weeks ago are now balking at his call for the U.S. to be "opened up" by Easter.
  5. World updates: In Spain, over 1,400 people were confirmed dead between Thursday to Saturday.
  6. 🚀 Space updates: OneWeb filed for bankruptcy amid the novel coronavirus pandemic.
  7. Hollywood: Tom Hanks and Rita Wilson have returned to U.S. after being treated for coronavirus.
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Coronavirus updates: Deaths surge in Italy and Spain

Data: The Center for Systems Science and Engineering at Johns Hopkins, the CDC, and China's Health Ministry. Note: China numbers are for the mainland only and U.S. numbers include repatriated citizens and confirmed plus presumptive cases from the CDC

The novel coronavirus has since Friday killed 889 more people in Italy and 832 others in Spain, which announced all non-essential workplaces would close for two weeks.

The big picture: The number of deaths from COVID-19 surpassed 2,000 on Saturday in the U.S., which leads the world in confirmed coronavirus infections — more than 121,000, per John Hopkins. The number of those recovered from the virus in the United States passed the 1,000-mark on Saturday evening.

Go deeperArrowUpdated 10 mins ago - Health

U.S. coronavirus deaths top 2,000

Nurses in masks, goggles, gloves, and protective gowns at Penn State Health St. Joseph conduct drive-thru coronavirus testing in Bern Township, Pennsylvania on March 27. Photo: Ben Hasty/MediaNews Group/Reading Eagle via Getty Images

More than 2,000 people have died from the novel coronavirus in the U.S. as of Saturday, per data from the Center for Systems Science and Engineering at Johns Hopkins University.

Why it matters: Recorded deaths in the U.S. surpassed 1,000 two days ago. The U.S. has the most COVID-19 cases in the world, exceeding China and Italy.

Go deeper: Trump weighs quarantine of New York, New Jersey, Connecticut