SSM Health, Ascension Want To Make Own Pharmaceuticals To Avoid Shortages, Price Gouging

5 Health Systems Across US Creating Nonprofit Generic Drug Company

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insulin being put into a needle
Reed Saxon/AP Photo

Some health systems are going to expand what they do. They’re not only going to administer pharmaceuticals but also make them.

Two national health systems with hospitals and clinics in Wisconsin are among five health systems across the United States seeking to create a nonprofit generic drug company, according to a decision announced Thursday. Availability of medications and price spikes are driving the move.

“Drug shortages, sharp increases for critical medications are a driving factors. For instance the price of insulin alone over the years has increased over 350 percent. That is a necessary, lifesaving medication for people with diabetes,” said SSM Health’s Carter Dredge. He’s chief transformation officer for the Missouri-based health system, which has hospitals in Janesville, Baraboo and Madison.

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The five health systems involved in the effort are SSM Health, Ascension, Intermountain Healthcare, Trinity Healthcare and the U.S. Department of Veterans Affairs.

The group hasn’t determined whether to make generic drugs directly or subcontract to a licensed manufacturer. They also have not disclosed what generic drugs will be produced. The plan is to focus on drugs prone to shortages and price manipulation.

“The exact list of drugs that we will be producing is still in determination. We’re not ready to announce that at this time,” Dredge said.

The group of health systems does not have a timeline on how soon they’ll move forward and what the next steps might be.

“We realize this is an urgent need. We are moving swiftly, however exact deadlines and milestones are not ready to be announced,” Dredge said. “We expect to continue to work with other health systems; and yes, while it is complex, we have a strong set of advisers and experts we’ll work with. It’s a really exciting time in health care.”