Several U.S. hospital systems have joined forces to create their own pharmaceutical company to prevent essential medicines from going scarce and prices to skyrocket because a handful of people manipulate the market.
This is a shot across the bow of the bad guys,
said the CEO of Intermountain Healthcare, Dr. Marc Harrison.
Intermountain Healthcare is the hospital group leading the initiative. Its executives wouldn’t say which drugs will be produced by the new company, but there are many drugs out there that are still waiting for a generic version which never gets produced.
Therefore, many hospitals have overcharged their patients to offset the high prices of vital drugs.
Ascension, a Catholic hospital group, also plans to join the effort to build a company that will offer a constant stream of generic drugs to U.S. hospitals. The Department of Veterans Affairs showed interest in the initiative as well.
So far, the new plan has attracted 300 hospitals, but more are expected to participate.
Hospitals Eyeing Some Drugs, Not the Industry
Harrison said the top priority are certain drugs, not an entire industry. Dr. Kevin A. Schulman, an expert in generic drugs who advises the initiative, is confident that the new move will be able to seriously threat people that are manipulating prices and creating artificial shortages for their own gain.
There are indeed investors that have created a monopoly on certain markets by purchasing off-patent drugs and hiking prices overnight. These moves have led to federal investigations and Congressional hearings, but the practices are not illegal.
For instance, former hedge fund manager Martin Shkreli bought the life-saving drug Daraprim in 2016 and raised the price from $13.50 to $750, sparking a huge backlash. Skkreli was eventually charged for wrongdoings while working as a hedge fund manager, not price gouging.
Hospitals also want to fix the problem with shortages for essential drugs like morphine, heart medication, or sodium bicarbonate.
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