Senior living parent companies form 'game-changing' drug company

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The partners still must make decisions about which drugs to offer and whether to directly manufacture them or subcontract that work.
The partners still must make decisions about which drugs to offer and whether to directly manufacture them or subcontract that work.

Four healthcare giants — among them the parent companies of senior living community operators — in consultation with the Veterans Health Administration have joined together to form a new nonprofit generic drug company that will aim to benefit senior living residents and others.

The company has not been named publicly.

The collaborators describe the effort as “game-changing” and “ambitious,” saying it is meant to help those affected by “unwarranted shortages and high costs of life-saving generic medications” and that it will be “bringing healthy competition to the market for generic drugs.”

Advisory committee

An advisory committee that will guide the formation of the new not-for-profit generic drug company includes experts from the pharmaceutical industry, business and government:

  • Madhu Balachandran, retired executive vice president of global operations of biotechnology company Amgen.
  • Don Berwick, M.D., president emeritus and senior fellow of the Institute for Healthcare Improvement and former administrator of the Centers for Medicare & Medicaid Services.
  • Clayton Christensen, a professor at the Harvard Business School and founder of management consulting firm Innosight.
  • Bob Kerrey, managing director of investment bank Allen & Co., former Nebraska governor, U.S. senator and pharmacist.
  • Martin VanTrieste, retired senior vice president and chief quality officer of Amgen.

“If the only way to provide our communities with affordable drugs is to produce them ourselves, then that is what we will do,” Richard J. Gilfillan, M.D., CEO of Trinity Health, said in a Thursday announcement of the plan. “We look forward to more healthcare systems around the country joining this people-centered effort.”

The partners consulting with the VA in the initiative:

  • Ascension — The largest nonprofit health system in the United States and the world's largest Catholic health system, based in St. Louis, has 141 hospitals and an Ascension Living subsidiary that serves more than 10,000 older adults in more than 30 senior living communities across 11 states and employs more than 5,500, according to the company.
  • Trinity Health — The Livonia, MI-based not-for-profit Catholic health system, the second-largest in the United States, serves more than 35,000 older adults at 36 Trinity Health Senior Communities across seven states, according to the company. Trinity Health operates 93 hospitals.
  • SSM Health — The St. Louis-based not-for-profit Catholic health system includes 10 post-acute facilities in addition to home care and hospice services, 24 hospitals, more than 300 physician offices and other outpatient care sites, a pharmacy benefit company, an insurance company, a technology company and an accountable care organization.
  • Intermountain Healthcare — The leader of the initiative is a Salt Lake City-based not-for-profit health system that has 22 hospitals, 180 clinics and a health insurance plan.

Ascension Living was ranked No. 8 and Trinity Health Senior Communities was ranked No. 9 on the 2017 LeadingAge Ziegler 150 list of largest not-for-profit multi-site senior living organizations, based on total units. Ascension Living had 4,624 as of Dec. 31, 2016, according to the list, and Trinity Health Senior Communities had 4,198. The organizations offer affordable seniors housing, independent living, assisted living, memory care and skilled nursing and rehabilitation at senior living communities and continuing care retirement communities, also known as life plan communities.

The Department of Veterans Affairs' Veterans Health Administration is the largest integrated healthcare system in the country, providing healthcare to more than 9 million veterans, according to the government entity. The VA has not provided financial support for the project.

The organizations intend for the new company to be an FDA-approved manufacturer.

Trinity Health spokeswoman Eve Pidgeon told McKnight's Senior Living that the effort is in the early stages, too soon to share specfic details about when the company will be operational and with what products. The partners still must make decisions about whether to directly manufacture medications or subcontract that work, she added.

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