Canadian Manufacturing

Groups make own drugs to fight high drug prices, shortages

The efforts are at varying stages, but some have already made and shipped millions of doses.

August 10, 2021  by Associated Press

Impatient with years of inaction in Washington on prescription drug costs, U.S. hospital groups, startups and nonprofits have started making their own medicines in a bid to combat stubbornly high prices and persistent shortages of drugs with little competition.

The efforts are at varying stages, but some have already made and shipped millions of doses. Nearly half of U.S. hospitals have gotten some drugs from the projects and more medicines should be in retail pharmacies within the next year as the work accelerates.

Most groups are working on generics, while at least one is trying to develop brand-name drugs. All aim to sell their drugs at prices well below what competitors charge.

“These companies are addressing different parts of the problem and trying to come up with novel solutions” to produce cheaper medicines, said Stacie Dusetzina, a Vanderbilt University health policy professor. “People should be able to access the drugs that work for them without going broke.”

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While some of the projects are solving supply problems and reducing medication costs for hospitals, drug price experts are split on how much consumers will benefit.

Dusetzina said the efforts could bring needed price competition, at least for some drugs.

Civica Rx was started three years ago by a hospital consortium. It now provides over 50 generic injectable medicines in chronic shortage to more than 1,400 hospital members and the Veterans Affairs and Defense departments. It already has sold enough medication to treat 17 million people, including many hospitalized with COVID-19.

Now it’s expanding to help patients directly, said chief executive Martin VanTrieste. Its new partnership with Anthem and Blue Cross health plans, CivicaScript, is picking six or seven expensive generic drugs to start. It will have contract manufacturer Catalent start producing those drugs to sell at 50,000 retail pharmacies starting in 2023.

Brand-name drugs get monopolies lasting up to two decades under U.S. patent law, so most of the alternative drugmakers are targeting certain off-patent medicines whose prices have risen dramatically in recent years.

Generics are usually cheap. But as buyers pushed for barely break-even prices on these drugs over the last couple decades, generic manufacturers consolidated. With fewer factories making certain generics, even temporary plant closures triggered lasting shortages. And the reduced competition led to big price hikes, often forcing doctors to try costlier, less-effective alternatives and hospital pharmacists to spend long hours seeking alternatives for drugs in shortage.

The alternative drugmakers are hiring U.S. contract manufacturers whenever possible and getting drug ingredients here or in Europe, to diversify supply chains heavily reliant on China and India, which limited exports of drugs and ingredients early in the pandemic. The Biden administration also is working to increase domestic production of essential generic drugs.