Dissatisfied with years of Washington’s inaction on prescription drug costs, hospital groups, startups and nonprofits in the United States have begun producing their own drugs in an effort to grapple with persistently high prices and persistent drug shortages with little competition.
These efforts are at various stages, but some of them have already manufactured and dispatched millions of doses. Nearly half of US hospitals have received some drugs through projects, and more drugs are expected to be available in retail pharmacies over the next year as work speeds up.
Most groups are working on generics, while at least one is trying to develop brand name drugs. Everyone strives to sell their drugs at prices significantly lower than those of competitors.
“These companies are looking at different parts of the problem and trying to find new solutions” to make cheaper drugs, said Stacey Dusetsina, professor of health policy at Vanderbilt University.
“People need to have access to the drugs that work for them and not go broke.”
While some projects are addressing supply issues and reducing the cost of hospital medicines, drug price experts are divided over how consumers will benefit.
Dusetzina said the effort could generate the necessary price competition for at least some drugs.
Dr. Aaron Kesselheim, a Harvard Medical School researcher and pricing expert at Brigham & Women’s Hospital in Boston, believes that for some drugs, these projects “can reduce patient out-of-pocket costs … absolutely.”
But David Mitchell, founder of Patients for Affordable Drugs, an independent consumer group, said the projects are workarounds that help in niches, but “not enough to fix a faulty system.”
Civica Rx was founded three years ago by a consortium of hospitals. It currently provides over 50 chronic shortage of generic injectable drugs to more than 1,400 hospital and veterans affairs and defense personnel. He has already sold enough drugs to treat 17 million people, including many hospitalized with COVID-19.
“It is now expanding to help patients directly,” said CEO Martin VanTrieste. As part of CivicaScript’s new partnership with Anthem and Blue Cross health plans, he chooses six or seven expensive generic drugs to start with. Under the contract, the manufacturer Catalent will begin manufacturing these drugs, which will be sold in 50,000 retail pharmacies starting in 2023.
Other “alternative drug manufacturers” include:
– Two businesses, from Premier Inc. and Phlow Corp., have focused on providing their hospital patients with affordable generics that are chronically in short supply.
– NP2, which is about to start production of cheaper generic anticancer drugs for intravenous administration.
– EQRx, which makes branded cancer and inflammatory drugs that sell at “radically lower prices” than competing brands.
Walmart recently added insulin to its own brand of diabetes products. He sells his own version of NovoLog food intake insulin in partnership with Novo manufacturer Nordisk for less than half the price of NovoLog.
Even entrepreneur Mark Cuban stepped in, handing over his name and money to a public company seeking to provide cheap alternatives to high-priced generic drugs 15% higher than manufacturing costs, without insurance.
In January, Mark Cuban Cost Plus Drug Co. launched its first drug, parasitic worm pills, which it sells through independent pharmacies for about $ 40 for a two-dose treatment, said founder and CEO Dr. Alex Oshmyanski. The company is building a plant in Dallas, but so far pays other manufacturers and plans to release up to 100 more drugs by the end of the year.
Dusetsina of Vanderbilt believes the Cuban company is best at cutting cash costs.
“This is a really good project with products that have little competition or overpriced,” she said.
Brand name drugs gain a monopoly for up to two decades under US patent law, so most alternative drug manufacturers target certain generic drugs that have seen prices skyrocketing in recent years.
Generics are usually cheap. But as buyers have pushed for near-loss-even prices for these drugs over the past couple of decades, generic manufacturers have consolidated. With fewer factories producing certain generics, even temporary plant closures caused chronic shortages. And the decline in competition has led to significant price increases, often forcing doctors to try more expensive and less effective alternatives, and hospital pharmacists to spend long hours looking for alternatives to scarce drugs.
These perennial shortages spurred the creation of Civica. It also led the hospital group’s leading purchasing organization, Premier Inc., to launch a program in which contractors manufacture more than 60 products for approximately 850 participating hospitals, according to its Pharmacy Director Jessica Daly. Both groups say they have many drugs on national deficiency lists.
Phlow Corp., a community-based drug maker heavily funded by government grants, teamed up with 11 leading children’s hospitals in March to address drug shortages by producing generic pediatric doses for cancer and other life-threatening treatments. states. Phlow and Civica are building neighboring factories in St. Petersburg, Virginia.
Such efforts are helping hospitals stockpile life-saving medications – sedatives, pain relievers, antibiotics and respiratory drugs – for COVID-19 patients.
Alternative drug manufacturers hire US contract manufacturers whenever possible and obtain drug ingredients here or in Europe to diversify supply chains heavily dependent on China and India, which limited the export of drugs and ingredients at the start of the pandemic. The Biden administration is also working to increase domestic production of essential generics.
Harvard’s Kesselheim foresees that new generic manufacturers will help increase supply and lower prices, but he believes that developing new brand-name drugs – as EQRx tries to do – is more difficult.
EQRx is currently testing 10 new drugs for which it is licensed to treat cancer and immunological diseases such as rheumatoid arthritis. One of them, already at the final stage of testing, can be launched within three years.
Next year, the company plans to begin work on 10 more patented drugs in the ultra-expensive categories and is partnering with Exscientia, a firm that uses artificial intelligence to develop drugs and accelerate testing.
According to the president of the company, Melanie Nallicherry, insurers are among the first investors in EQRx. They expect the company to be profitable, but they also support plans to set drug prices at up to two-thirds of competing brand name drugs, she said.