A new, nonprofit, generic-drug company, representing some 450 hospitals in the U.S., poses a potential threat to Teva Pharmaceuticals, which has for years dominated the generic sector, Globes reported on Sunday.
Intermountain Healthcare is leading a consortium with Ascension, SSM Health and Trinity Health, in consultation with the U.S. Department of Veterans Affairs to form a company whose mission is “to help patients by addressing the often unwarranted shortages and high costs of lifesaving generic medications.”
Intermountain says its aim is to qualify as an FDA-approved manufacturer that will either make the generic drugs, or sub-contract to reputable manufacturers, providing patients an affordable alternative to the profit-making firms whose capricious and unfair pricing practices are hurting consumers.
“As has been widely reported, certain generic drug manufacturers have been widely criticized for unwarranted and arbitrary price increases, and for creating artificial shortages of vital medications. These activities have resulted in some generic drugs increasing in cost by more than 1,000 percent in just a few months for seemingly no reason.
“Research into the actual costs of manufacturing and distributing generic drugs suggests that, in many instances, generic drug prices can be reduced to a fraction of their current costs, saving patients, and the healthcare systems that care for them, hundreds of millions of dollars each year.”
Teva was not named in the statements, but as the largest generic drug producer, criticism of it was obviously implied.
The emergence of a potentially major rival of this type comes at a sensitive time for Teva, which in recent weeks has seen a reversal of the slide in its share value.
Teva’s share price, which had doubled since its low-point in early November, was down 4.2 percent at $20.60 on the NYSE Sunday, giving a market cap of $20.9 billion.