Hospitals are forming their own drug company to fight high drug prices.
An FKD Feature exclusive

Healthcare in America has always been a topic of debate. Often mentioned in the conversation is coverage of necessary drugs for patients by insurance companies. This made headlines not too long ago when Martin Shkreli raised the price of drugs that were necessary for HIV/AIDS patients, including Daraprim. Will hospitals banding together help or hurt the drug industry?

Drug companies

According to Axios, “Four not-for-profit hospital systems that own 10 percent of U.S. hospitals — Intermountain Healthcare, Ascension, SSM Health and Trinity Health — are banding together to create a new generic drug company.” The types of drugs that will be manufactured has not been revealed because executives don’t want other drug companies to temporarily lower their prices, only to raise them in the future.

The new drug company, called Intermountain, will collaborate with pre-existing organizations that are involved in the insurance agency. The aim is to discourage pharmaceutical companies that exploit the system, like in the case of Shkreli.

Many prescription drug companies are privately owned, meaning in some cases there is little regulation on prices. According to Axios, “brand-name drugs account for 72% of drug spending, but only 10% of filled prescriptions.”


In America, drug spending per capita is higher than any other country. Personal medical costs account for almost 20 percent of a personal budget, and spending costs on health care are often thousands of dollars.

Intermountain is staking its claim by planning to drive down the prices of medications. After all, high drug prices are not linked to research and development of drugs but rather market prices. With this advancement, the issue of high drug prices is being tackled.

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Header image: Getty Images


Posted 02.09.2018 - 01:00 pm EDT