Fed up with drug companies, hospitals decide to start their own

Some of the largest U.S. hospital systems are planning to go into the drug business themselves in response to rising prices and occasional scarcities. "We are not going to lay down. We are going to go ahead and try and fix it," says Marc Harrison, MD, the chief executive of Intermountain Healthcare, the nonprofit Salt Lake City hospital group that is spearheading the effort. Several major hospital systems plan to form a new nonprofit company, that will provide a number of generic drugs to the hospitals. The Department of Veterans Affairs is also expressing interest in participating. In all, about 300 hospitals are now included in the group. Other hospitals are expected to join. Harrison says they plan to focus only on certain drugs. "There are individual places where there are problems," he says. "We are not indicting an entire industry." Kevin Schulman, MD, of the Duke University School of Medicine who has studied the generic drug market and is advising the effort, says: "If they 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." The new company will initially focus on selling to hospitals, but officials say they may eventually expand to offer the products more broadly.