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Aug. 10, 2021, 12:05 p.m. EDT

U.S. groups make their own drugs to fight high drug prices and shortages

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By Associated Press

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Vanderbilt’s Dusetzina sees Cuban’s company as best positioned to cut out-of-pocket costs.

“It’s a really nice project to go after products where there’s little competition — and price gouging,” she said.

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 of 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.

Those years-long shortages spurred Civica’s formation. It also led a top hospital group purchasing organization,  Premier Inc. , to launch a program that has contractors making more than 60 products for about 850 member hospitals, said its chief pharmacy officer, Jessica Daley. The two groups say they’ve gotten numerous drugs off national shortage lists.

Phlow Corp. , a public benefit drug manufacturer largely funded by government grants, partnered in March with 11 top children’s hospitals to address shortages by making generic medicines in child-size doses for cancer and other life-threatening conditions. Phlow and Civica are building neighboring factories in Petersburg, Virginia.

Such efforts have been helping hospitals stock crucial drugs — sedatives, painkillers, antibiotics and respiratory medicines — needed for COVID-19 patients.

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.

Harvard’s Kesselheim foresees the new generic manufacturers helping to boost supply and lower prices, but he thinks developing new brand-name drugs — as EQRx is trying to do — is tougher.

EQRx is currently testing 10 novel drugs that it licensed the rights to, for cancers and immunologic disorders like rheumatoid arthritis. One already in final-stage testing could launch within three years.

The company expects to start work on another 10 patented drugs in ultra-expensive categories in the next year and is collaborating with  Exscientia , a firm that uses artificial intelligence to design drugs and speed up testing.

Insurers are among EQRx’s early investors, said the company’s president, Melanie Nallicheri. They expect the company to turn a profit, but they also support plans to price medicines at up to two-thirds off rival brand-name drugs, she said.

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