19 Jan New Roads Being Paved Due to Increasing Market and Cost Pressures
Working in the healthcare industry, it’s difficult to miss the signs and changes occurring due to consolidation. There are ever increasing market pressures in our industry to increase the level of care quality while reducing the overall cost of providing that care.
In that vein, four not-for-profit health systems have announced plans to create their own generic drug company. Modern Healthcare reported that “Intermountain Healthcare, Ascension, SSM Health and Trinity Health are working with the U.S. Department of Veterans Affairs to pool their capital and 450 total hospitals to fight back against drug companies that unexpectedly hike the prices of decades-old off-patent generic drugs with minimal competition. They also look to create a more reliable supply of generic drugs like saline and sodium bicarbonate that are vulnerable to shortages.” Experts believe it would be most beneficial for the group to acquire an existing drug manufacturer, rather than build the needed infrastructure from the ground up.
As reported by Modern Healthcare, Dr. Marc Harrison, president and CEO of Intermountain Healthcare, one of the four systems involved in this endeavor, said “our goal is not to create a competitive advantage for the people who participate in this, it is about creating a company that has a social benefit of making sure that anyone who needs the medication we produce has it at their disposal.” It has been said that necessity is the mother of invention. This continues to be the M.O. for the healthcare industry.