VA, 4 health systems to form generic drug company to address shortages, costs

Representing more than 450 hospitals, the company plans to make essential generic medicine more affordable.
By Bernie Monegain
12:26 PM
generic drug company

Intermountain Healthcare has announced that it is aligning with the U.S. Department of Veterans Affairs and Ascension Health, SSM Health and Trinity Health to establish a nonprofit generic drug company with the goal of addressing shortages and the high costs of medications.

Participating organizations represent more than 450 hospitals around the country. The new company plans to make essential generic medications more available and more affordable, and the leaders of the initiative expect other health systems will join them.

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“It’s an ambitious plan,” Intermountain president and CEO Marc Harrison, MD, said in a statement. “But healthcare systems are in the best position to fix the problems in the generic drug market. We are confident we can improve the situation for our patients by bringing much-needed competition to the generic drug market.”

In addition to senior-level executives from Ascension, Intermountain, SSM and Trinity, the project has enlisted advisors including former CMS administrator Don Berwick, MD, who is now president emeritus of the Institute for Healthcare Improvement, Harvard professor and Innosight founder Clayton Christensen, former Nebraska governor, Bob Kerrey, who now serves as managing director of Allen & Company, retired Amgen chief quality officer Martin VanTrieste, and retired executive vice president of Global Madhu Balachandran.

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The organizations intend to make the not-for-profit an FDA approved manufacturer and will either directly manufacture generic drugs or sub-contract such work to reputable companies, officials said.

Officials said they plan to stabilize the supply of essential generic medications administered in hospitals, many of which have chronic shortages, and they hope doing so will result in lower costs and more predictable supplies of essential.

“The best way to control the rising cost of healthcare in the U.S. is for payers, providers and pharmaceutical companies to work together and share responsibility in making care affordable,” said SSM Health CEO Laura Kaiser.

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