Eleven health systems and the group purchasing organization Premier have acquired a stake in a specialty pharmaceutical company to ensure steady supplies of key drugs.
The group now owns a minority stake in Exela Holdings, the holding company of Exela Pharma Sciences, which makes proprietary and generic sterile injectable products. Financial terms were not disclosed.
Charlotte, N.C.-based Premier said the deal ensures its member health systems an uninterrupted supply of 19 pharmaceutical products, including several generic injectables that frequently appear on the U.S. Food and Drug Administration's drug shortage list. One example is sodium bicarbonate, an injectable drug currently on the shortage list that's used to treat kidney conditions, diabetes complications and cardiac emergencies. The deal also includes cysteine hydrochloride, a drug that's used by patients who need their food infused intravenously and has been on and off the FDA's shortage list since 2015.
The COVID-19 pandemic has exacerbated drug shortages because of sourcing issues from overseas manufacturers, export bans from large ingredient producers and demand spikes. Shortages were also a problem before the pandemic, one that cost healthcare providers almost $360 million in annual labor expenses.
The systems also will have access to Exela's 503B compounded pharmaceutical products. Exela recently expanded its manufacturing facility in Lenoir, North Carolina.
Participating health systems include Baystate Health in Springfield, Massachusetts, Genesis Health System in Davenport, Iowa, Henry Ford Health System in Detroit, McLaren Health Care in Grand Blanc, Michigan, Memorial Healthcare System in Hollywood, Florida, OSF HealthCare in Peoria, Illinois, Riverside Health System in Newport News, Virginia, Saint Francis Health System in Tulsa, Oklahoma, Texas Health Resources in Arlington, Texas and Universal Health Services in King of Prussia, Pennsylvania.
Each system has signed a multi-year commitment to buy a portion of its drugs from Exela through Premier's GPO.
"With this investment, we are committing to support the domestic production of vital medicines for our members and the market—and to bring much-needed solutions to help eliminate drug shortages," Premier CEO Michael Alkire said in a statement.
Publicly-traded Premier's share price was up about 2.6% at Wednesday's market close.