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Hospitals Creating Company to Make Cheap Generic Drugs

Their goal is to prevent shortages and give patients the best choices

The goal is to counter the consolidation of generic drugmakers that's caused shortages for more than a decade. Carol Yepes/Getty Images . The plan, recently announced, follows years of shortages of generic injected medicines that are the workhorses of hospitals, along with some huge price increases for once-cheap generic drugs. Those problems drive up costs for hospitals, require staff time to find scarce drugs or devise alternatives, and sometimes mean patients don't get the best choice. Get instant access to members-only products and hundreds of discounts, a free second membership, and a subscription to AARP the Magazine. The not-for-profit drug company initially will be backed by four hospital groups — Intermountain Health, Ascension, Trinity Health and SSM Health — plus the VA health system. Together, the five groups include more than 450 hospitals, nearly one-tenth of U.S. hospitals. They also run numerous clinics, nursing homes, doctors' offices and other medical facilities, along with hospice and home care programs and an insurance plan. More health systems are expected to join. The goal is to counter the consolidation of generic drugmakers that's caused shortages for more than a decade and allowed some companies to , including the cost of antibiotics, morphine and heart drugs. "It's an ambitious plan," Intermountain Healthcare CEO Marc Harrison said in a statement. He said health care systems "are in the best position to fix the problems in the generic drug market. We witness, on a daily basis, how shortages of essential generic medication or egregious cost increases for those same drugs affect our patients." AARP Membership — $12 for your first year when you sign up for Automatic Renewal Get instant access to members-only products and hundreds of discounts, a free second membership, and a subscription to AARP the Magazine. AARP VALUE & MEMBER BENEFITS See more Health & Wellness offers > See more Flights & Vacation Packages offers > See more Finances offers > See more Health & Wellness offers > SAVE MONEY WITH THESE LIMITED-TIME OFFERS