Hospitals are fed up with drug companies, so they’re starting their own

September 6, 2018

A group of major American hospitals, battered by price spikes on old drugs and long-lasting shortages of critical medicines, has launched a mission-driven, not-for-profit generic drug company, Civica Rx, to take some control over the drug supply.

Backed by seven large health systems and three philanthropic groups, the new venture will be led by an industry insider who refuses to draw a salary. The company will focus initially on establishing price transparency and stable supplies for 14 generic drugs used in hospitals, without pressure from shareholders to issue dividends or push a stock price higher.

Elie M. Bahou, chief pharmacy officer of Providence St. Joseph Health, [...] said the criteria include drugs that underwent price increases of 50 percent or more between 2014 and 2016 and essential medicines that were on national shortage lists.

“The risk of doing nothing is that we’ll continue with the same price escalations and shortages we’ve had,” said Amy Compton-Phillips, chief clinical officer of Providence St. Joseph Health. “The risk of doing nothing to me seems higher than actually trying creative solutions to solve the problem.”


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