Goal is to permanently address drug shortage problem, ensuring continuous access to life-saving products at an affordable price
CHARLOTTE, N.C. (January 14, 2019) — Premier Inc. (NASDAQ: PINC), a leading healthcare improvement company, today announced a company it has established to help ensure health systems have continuous and affordable access to shortage medications, as well as those in categories that lack competition. The company builds on Premier’s eight-year track record of direct contracting for healthcare supplies and extends existing programs that are successfully providing uninterrupted access to more than 91 shortage stock keeping units (SKUs).
The company, ProvideGx, provides a vehicle for Premier to invest in innovative new business models and partnerships to address drug shortages, including partnering with quality generic drug manufacturers that can supply shortage products, co-funding the development of affordable products that address specific market needs, and securing contracts for active pharmaceutical ingredients to ensure a continuous supply as well as strategic sourcing agreements. ProvideGx has already partnered with five high-quality generic manufacturers to address a targeted pipeline of 60 crucial drugs, and expects to begin marketing additional shortage products next month, pending approval by the U.S. Food and Drug Administration.
“As the trusted sourcing organization for hundreds of pharmaceutical products, aggregating the purchasing demand of hundreds of thousands of providers, Premier is already a recognized leader in preventing drug shortages and price spikes,” said Michael J. Alkire, Chief Operating Officer of Premier. “Given our deep expertise, data-driven insights on the supply channel and unique partnership model with our members, ProvideGx is a natural extension of Premier’s overall approach. Consistent with our member-led direct contracting supply chain strategy, this initiative is expected to take Premier’s work to a new level by partnering with and investing in companies that can reliably source shortage drugs via an efficient and price-competitive strategy.”
“For years Premier has been taking innovative steps to solve the complex drug shortage problem, and we are excited that they are bringing real solutions to the market,” said Paul Rathbun, Senior Executive Vice President and Chief Financial Officer of AdventHealth and Chair of Premier’s Member Value Improvement Committee.
According to the University of Utah Drug Information Service, 224 vital medications are in current shortage nationwide, including antimicrobials, cardiovascular drugs, sedation medications, electrolytes, nutritional supplements and chemotherapy drugs. As a result of these persistent shortages, 96 percent of health systems report that securing an adequate source of supply is a near constant challenge.
ProvideGx is guided by 31 Premier member health systems and the company’s National Pharmacy Committee, representing more than 1,000 hospitals across the nation.
Revenues from the new company are not expected to materially impact Premier FY 2019 results.
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