Rising prescription drug prices have been a major issue in the ongoing debate on the cost of healthcare. Horror stories abound, and they're not just anecdotes: a recent study with more than 28,000 drug codes from 2008 to 2016 found that prices rose faster than inflation.
This means that the costs do not increase, but that the drug companies benefit as well. Injectable drugs, for example, increased 15 percent during this period. These include life-saving treatments such as insulin; The price increases have increased the extremely dangerous practice of insulin rationing . (The government shutdown has also forced at least a federal worker to do the same while waiting for her paycheck.)
One way to combat price increases is to manufacture competitive generic drugs. Last year, a consortium of hospitals announced a joint effort to do so. The nonprofit organization, Civica Rx stated, "according to its mission statement, it is ensured that essential generics are accessible and affordable." Founding members included heavy hitters such as the Mayo Clinic, Catholic Health Initiatives and HCA Healthcare, and last week announced that 1
The idea behind Civica is that by producing their own medicines, hospitals can not only save money, but also stabilize supply and reduce the shortage of medicines. At the moment, hospitals – and therefore patients – are dependent on drug companies that underestimate demand or raise prices so much that hospitals can not afford to keep the drugs they need.
Civica aims to create a system in which this is not a concern. Prices will be transparent, based on manufacturing costs, and long-term contracts will rule out surprises. Member hospitals know exactly what the production of the medicine costs, and all pay the same price. On the other side of the equation, Civica can respond quickly to demand from member hospitals.
Initially, Civica plans to focus on 14 drugs (although it is not known for competitive reasons which are named) year. (Members' healthcare systems will decide how to expand this list in the future.) The goal is to manufacture medicines in the US, which would shorten supply chains and facilitate the timely provisioning of hospitals.
All this may sound very complicated. The bottom line, however, is that hospitals want to take control of drug manufacturing companies that often do not care about their patients. It is too early to tell if Civica will be able to cut prices and stabilize supply, but it has certainly won some powerful allies in its mission.