Survey: Majority of Providers Predict Success for New Generic Drug Company, Project Rx | Healthcare Informatics Magazine | Health IT | Information Technology Skip to content Skip to navigation

Survey: Majority of Providers Predict Success for New Generic Drug Company, Project Rx

May 25, 2018
by Heather Landi
| Reprints
Click To View Gallery

Back in January, four health systems, in consultation with the U.S. Department of Veterans Affairs (VA), announced a collaboration to develop a new, not-for-profit generic drug company with the aim of making generic medications more available and more affordable for patients and bringing more competition to the generic drug market.

A recent survey from Reaction Data, a market research firm focused on the healthare and life sciences industries, has found that 90 percent of hospitals and clinics said they would become a customer of this new drug company.

Salt Lake City-based Intermountain Healthcare is leading a collaboration with St. Louis-based Ascension, SSM Health, a health system also based in St. Louis, and Trinity Health, a health system based in Livonia, Michigan, along with the VA to develop the new nonprofit generic drug company, called Project Rx. The five organizations represent more than 450 hospitals around the U.S.

In the press release issued back in January, health system officials said the new company intends to be an FDA-approved manufacturer and will either directly manufacture generic drugs or sub-contract manufacturing to reputable contract manufacturing organizations. The health system officials state that the new company will “provide patients an affordable alternative to products from generic drug companies whose capricious and unfair pricing practices are damaging the generic drug market and hurting consumers.”

Reaction Data surveyed 700 key decision-makers in the provider, payer, and pharmaceutical industries to gauge what impact they thought Project Rx, as it’s called, would have on the healthcare industry. The report reflects responses from executives from 605 provider organizations, 91 big pharma and 53 payers.

While 60 percent of providers were unaware of the venture, when asked if it will be a success, the responses were overwhelmingly positive. Sixty-nine percent of providers believe the new venture will be successful, while 58 percent of payers expressed optimism.

Respondents also were asked if they think other hospitals will follow suit Among providers, 77 percent said they believe other hospitals will become customers of the new drug company. Among payers, only 63 percent think other hospitals will follow suit.

According to the report, prescription drug prices are rising at an alarming rate. In 2016, total drug costs went up about three times the rate for other goods and services, according to the U.S. Department of Labor. About 20 percent of generics have had price hikes of at least 100 percent between 2013 and 2017, according to analysis by the Drug Channels Institute.

The survey also gauges healthcare executives’ attitudes of big pharma. Seventy percent providers have a negative attitude of big pharma, 11 percent are neutral and 19 percent have a positive attitude, according to the survey. Of those respondents who had positive feelings toward pharmaceutical companies, R&D appears to be the key.

“The willingness of providers to open their arms to Project Rx likely lies in the general negative attitude toward big pharma,” the report states, noting that when asked about the current market as it relates to the existing pharma industry, one provider responded, “I think they are out to make large profit for investors even if it hurts patients. They are self-serving. They spend large amounts of money lobbying the government for their own ends, not those of patients.”

The majority of pharmaceutical executives (72 percent) said they don’t feel this poses any real threat to the industry. Asked about their attitude towards Project Rx, 22 percent of pharmaceutical executives have a positive attitude, 49 percent have a negative opinion and 29 percent are neutral. One pharma exec said, “Their money would be better spent in negotiations with current generic drug manufacturers.”

When respondents were asked about the motivation behind the development of Project Rx, the vast majority alluded to reducing drug prices (81 percent), reducing the cost of care (71 percent) and increasing the supply of drugs (61 percent). Sixty percent of respondents cited having better control of the healthcare value chain. Also, 45 percent cited “force pharmaceutical companies to change” and 9 percent said “accelerate the move to personalized medicine.”

The report also notes that Project Rx faced both challenges and opportunities as it enters the pharma space. Participants in the survey expressed concerns about whether the new company would be able to focus on the right generics and their ability to scale. “Combined with gag clauses, clawbacks, and drug patents, Project Rx certainly faces an uphill battle,” the report stated. However, with the general negativity toward the pharmaceutical industry, the new venture may have the wind at its back, the report notes.

Get the latest information on Health IT and attend other valuable sessions at this two-day Summit providing healthcare leaders with educational content, insightful debate and dialogue on the future of healthcare and technology.

Learn More



House Appropriations Bill Includes 29 Percent Budget Cut for ONC, $1.25B Increase for NIH in 2019

The House Appropriations Committee released a draft 2019 budget for the U.S. Department of Health and Human Services (HHS) and departments of Labor and Education that proposed slashing funding for the Office of the National Coordinator for Health IT (ONC) by $17.7 million.

Value-Based Care is Bending the Cost Curve, Report Finds

Value-based care is bending the healthcare cost curve, reducing unnecessary medical costs by nearly 6 percent on average while also improving care quality and patient engagement, according to new research from Nashville-based Change Healthcare.

Health Share of Oregon Facing Challenges with Ride to Care Service

Health Share of Oregon’s non-emergency transportation vendor is in danger of losing money if it doesn’t meet its performance targets by the end of June, the coordinated care organization recently stated.

NJ Hospital Association Invests in Opioid Tracking Tool for Hospitals

As opioid overdoses continue to claim more lives, the New Jersey Hospital Association and its Health Research and Educational Trust announced a $1.5 million investment in an emergency department tracking tool for hospitals statewide to better monitor opioid prescriptions.

Sequoia Project Revises National Patient Matching Framework

The nonprofit Sequoia Project, an industry advocate for nationwide interoperability, has released a revised national patient matching framework.

Kaiser, Emory Healthcare Partner on Integrated Care Model in Atlanta

Emory Healthcare, the clinical arm of Emory University, and Kaiser Permanente have announced a partnership in metropolitan Atlanta.