Hospitals Plan to Produce Their Own Generic Drugs

Some of the largest hospital systems in the United States plan to start making their own generic drugs in order to avoid huge price increases and shortages of medicines.

Currently, about 300 hospitals are among those that plan to form a new nonprofit company that will produce the drugs, and other hospitals are expected to join, The New York Times reported.

The company would focus only on certain drugs, said Dr. Marc Harrison, chief executive of Intermountain Healthcare, the nonprofit Salt Lake City hospital group that is leading the effort.

"There are individual places where there are problems," he told The Times. "We are not indicting an entire industry."

The goal is to thwart companies that buy monopolies of old, off-patent drugs and then sharply increase prices.

"If (the hospitals) all agree to buy enough to sustain this effort, you will have a huge threat to people that are trying to manipulate the generic drug market. They will want to think twice," Dr. Kevin A. Schulman, a professor of medicine and generic drug expert at the Duke University School of Medicine who is advising the hospital groups, told The Times.

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