Peeved by price gouging and shortages, hospitals will now make their own drugs

[Jackrabbit]

Peeved by price gouging and shortages, hospitals will now make their own drugs

For four of the country’s largest hospital systems, enough is enough.

Sick of drug companies’ eye-popping price hikes and ridiculous shortages, the feisty hospital systems announced Wednesday that they’ve banded together and formed an unnamed non-profit to make their own steady supply of affordable generic medicines.

[dancer_rnb]

Hope this works.

[Jackrabbit]

Especially if they will make the drugs directly available to us as well, especially via medicare.

[praxis]

As if hospitals have a history of being fair on price?

[Jackrabbit]

It's probably a matter of how unfair. If hospitals and drug companies gouge you, it's a double hit.

But it wasn't just price, it was the issue of shortages. If you can't get the drug at all, the price doesn't matter too much.

[Roo St. Gallus]

Hmmm...I suspect that if this were to go forward, the initial selection of drugs made by the hospital manufacturers could well be met with a response from the (price-leadership) oligopolistic pharmacutical industry. Typically, it would be price undercutting of the offending products such that the producer would be driven out of the market, whilst the oligopolists shift prices on other product lines to keep their revenues up while 'disciplining' the errant producers.

I'm not sure how this would work when the hospitals have other sources of income. And, as noted, large hospital networks, for-profit and non-profit, are not the most enlightened when it comes to pricing policies. If what we are seeing is a desire to charge their own outrageous fees through more vertical integration, then I would expect pricing to eventually bump up against what the predatory pharmaceutical industry might already get away with.

Oh...Artificially created shortages are great way for oligopolistic producers to justify price increases to their customers. "Demand and supply, don't cha know?"

[Jackrabbit]

[quote=""Roo St. Gallus""]Hmmm...I suspect that if this were to go forward, the initial selection of drugs made by the hospital manufacturers could well be met with a response from the (price-leadership) oligopolistic pharmacutical industry. Typically, it would be price undercutting of the offending products such that the producer would be driven out of the market, whilst the oligopolists shift prices on other product lines to keep their revenues up while 'disciplining' the errant producers.
[/quote]
They are aware of that issue, and are trying to address it, according to the article:

The group is not disclosing what specific medicines it will make out of fear that generic competitors could block them from the market by lowering prices temporarily. “We’re going to have to hold that very close to our vest,” Dr. Harrison told The Times.

[Roo St. Gallus]

[quote=""Jackrabbit""]

Hmmm...I suspect that if this were to go forward, the initial selection of drugs made by the hospital manufacturers could well be met with a response from the (price-leadership) oligopolistic pharmacutical industry. Typically, it would be price undercutting of the offending products such that the producer would be driven out of the market, whilst the oligopolists shift prices on other product lines to keep their revenues up while 'disciplining' the errant producers.

They are aware of that issue, and are trying to address it, according to the article:

The group is not disclosing what specific medicines it will make out of fear that generic competitors could block them from the market by lowering prices temporarily. “We’re going to have to hold that very close to our vest,” Dr. Harrison told The Times.

[/QUOTE]

Yes, but as soon as it is put in to play, they'll know exactly what items (and, I note that it is 'generics' which will hospital produced) are being produced by the consequent dip in demand on their stocks. They reply then. Why the secrecy? Does a 'head start' really mean that much?

Even if it is a feint in the pharma wars, it is useful. It is an idea, possibly workable, for an alternative market structure to the present one...which, of course, the status quo does not want anybody thinking about, much less aloud.

[praxis]

I think this hurts other generic manufacturers more than it hurts Pharmaceutical companies who have patents on the medications for a number of years (7 years I think).

What disturbs me most is that the pharma companies receive tax revenue for research and development and then overcharge the taxpayers.

[Jackrabbit]

[quote=""Roo St. Gallus""]

Hmmm...I suspect that if this were to go forward, the initial selection of drugs made by the hospital manufacturers could well be met with a response from the (price-leadership) oligopolistic pharmacutical industry. Typically, it would be price undercutting of the offending products such that the producer would be driven out of the market, whilst the oligopolists shift prices on other product lines to keep their revenues up while 'disciplining' the errant producers.

They are aware of that issue, and are trying to address it, according to the article:

The group is not disclosing what specific medicines it will make out of fear that generic competitors could block them from the market by lowering prices temporarily. “We’re going to have to hold that very close to our vest,” Dr. Harrison told The Times.

Yes, but as soon as it is put in to play, they'll know exactly what items (and, I note that it is 'generics' which will hospital produced) are being produced by the consequent dip in demand on their stocks. They reply then. Why the secrecy? Does a 'head start' really mean that much?

Even if it is a feint in the pharma wars, it is useful. It is an idea, possibly workable, for an alternative market structure to the present one...which, of course, the status quo does not want anybody thinking about, much less aloud.[/QUOTE]
The value I see is that the alternate source would glaringly prove that the prices don't have to be so fucking high in order to make a profit. The gougers would never admit that, but it would be obvious to everyone.

"If they can make the shit at that price and still make a profit, so can you greedy fucks."

Also, it could be hammered to the public that any gouger price reduction would be only temporary, while it would be a permanent reduction with these new companies.

[Roo St. Gallus]

[quote=""praxis""]I think this hurts other generic manufacturers more than it hurts Pharmaceutical companies who have patents on the medications for a number of years (7 years I think).

What disturbs me most is that the pharma companies receive tax revenue for research and development and then overcharge the taxpayers.[/quote]

Oh, there's much more to be disturbed about, but, yes.