Intermountain Healthcare to create drug company in response to price hikes

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SALT LAKE CITY -- Big news that could change the dynamic of the generic drug market. Intermountain Healthcare announced it will be manufacturing its own brand of generic drugs.

They are calling it Project Rx, and it includes five health systems that involve 450 hospitals nationwide.

During a press conference Thursday morning, Intermountain said they are already fielding calls from other health systems interested in partnering in its endeavor.

Intermountain Healthcare President and CEO Dr. Marc Harrison said they do not want to continue watching patients suffer because they cannot afford certain generic drugs due to their egregious prices.

“In some circumstances drugs have been driven up 1,000 percent… We believe drug prices can be reduced to a fraction of their current costs,” Harrison said.

In the last couple of years, patients have watched companies like Turing Pharmaceuticals, EpiPen, heart medication companies and others manipulate prices and increase them by hundreds of percentages.

“Our goal is to make sure essential generic drugs are available and affordable to everybody,” said Dan Liljenquist, vice president of enterprise and initiative for Intermountain. “So we invite everybody to partner with us. If you think about a successful business, you want to sell your product as broadly and as completely in the market as you can; we also want to make sure we are partnering in such a way that people will share our vision for this company.”

They have another year of studying the market and say they are working with scholars across the nation to find generic drug problems.

“The generic drug market has really been a mess over the last several years; we have rally seen a contraction in the number of suppliers of certain generic drugs and that has allowed certain players to manipulate the price of the drugs, and also it’s resulted in shortages," Liljenquist said. "It’s something we deal with every day in Intermountain as does the University [of Utah] and other hospitals around. There are some market failures that require additional intervention to fix, and so we came up with a pro-competitive market based solution that doesn’t require any legislation to go and enter this market and hopefully fix this problem.”

Liljenquist said this new company will be a non-profit, but also competitive.

“If we can pull everybody together and make a market up front with these systems, we can stabilize supply, we can bring costs down and actually enter this market and compete against some of these players who have been bad actors," Liljenquist said. "Now, that’s not everybody. There are a lot of great people we work with every day who are doing the right thing in the pharmaceutical space, but there are a handful of bad actors who are really hurting our patients.”

That said, Intermountain is looking for philanthropists willing to partner with them.

“This company would be the producer of last resorts for drugs; when there is a market manipulation going on, this company will enter in to stabilize each market drug by drug," Liljenquist said. "We see this in our head as a ‘societally owned public utility’ for creating drugs and making sure generic drugs are available and affordable.”

Intermountain will not reveal a list of the generic drugs it plans to manufacture but said it will happen in early 2019.