Fortune Article

Hello, readers! This is Sy.

Drug makers have largely ignored the public firestorm surrounding high drug prices. Now, a coalition of major U.S. hospitals is taking the matter into its own hands with a unique project: Creating a nonprofit generic drug company run by health systems.

The initiative, spearheaded by Intermountain Healthcare, has already attracted the support of some of the country’s biggest hospital chains and will be done in consultation with the Department of Veterans Affairs (VA). Current participants include Ascension, SSM Health, and Trinity Health, which encompass 450 hospitals across the U.S. (though the groups expect membership to rise as the plan comes to fruition).

“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 groups said in a press release. Furthermore, the company wants to address issues throughout the generic drug supply chain, including high prices and medicine shortages.

Price hikes in the generic drug market strike critics as particularly arbitrary given that many of them have been around for decades. “It’s an ambitious plan,” said Intermountain CEO Dr. Marc Harrison in a statement. “But health care systems are in the best position to fix the problems in the generic drug market. We witness, on a daily basis, how shortages of essential generic medications or egregious cost increases for those same drugs affect our patients.”

Read on for the day’s news.

Sy Mukherjee

@the_sy_guy

sayak.mukherjee@fortune.com

DIGITAL HEALTH

The first U.S. human CRISPR trial could begin any day. Emily Mullin at MIT Technology Review reports that the first U.S. human tests of the CRISPR gene-editing technology "could begin at any time." And the first use for the tech, which will be conducted by researchers at the University of Pennsylvania, will involve fighting cancer. Napster co-founder Sean Parker's cancer immunotherapy-focused organization is helping fund the study. (MIT Technology Review)

INDICATIONS

Vice President Pence promotes "Right to Try" legislation. Vice President Mike Pence on Thursday urged Congress to pass a "Right to Try" law that would give patients with terminal and/or rare disorders more leeway to take experimental medication that has yet to be cleared for the market. "Yesterday I met with @SGottliebFDA on the importance of passing a Right to Try law. It's about restoring hope and giving patients with life threatening diseases a fighting chance. Let's get this DONE," wrote Pence in his tweet.

THE BIG PICTURE

CHIP is playing a prominent role in the government shutdown drama. There is a decidedly non-zero possibility that the federal government will shut down on Friday night. In an effort to round up Democratic votes (necessary to pass a "continuing resolution" to fund the government because of GOP defections), House GOP leaders have included a six-year extension of the Children's Health Insurance Program (CHIP), which covers nine million kids in low- and middle-income families, in their bill. But Democrats are demanding either more long-term (even permanent) funding and protection for the DREAMers in exchange for their votes. If no deal is made, it would be the first time in modern history the government has shut down despite one party controlling both Congressional chambers and the White House; CHIP funding could run out in weeks in certain states.

HHS to officially establish division overseeing "religious freedom." The Department of Health and Human Services (HHS) will create a new division dedicated to health workers' "religious freedom" and "conscience objections" to performing certain kinds of procedures, such as abortions and treatment on transgender patients. Hailed as a victory for conservative religious groups, some doctors' organizations and patient advocated have warned that such a move could compromise care and breed discrimination. (Reuters)