Premier, Top Health Systems Acquire Exela to Combat Drug Shortages

Premier and 11 top health systems recently acquired a minority stake in Exela Holdings, the holding company of Exela Pharma Sciences, to combat drug shortages in the US. 

Participating Premier member health systems signed a multi-year commitment to purchase a portion of their pharmaceutical products from Exela through Premier’s group purchasing organization.

Under the terms of the agreement, the health systems will have an uninterrupted supply of 19 pharmaceutical products, including generic injectables that often appear on the FDA’s drug shortage list and Exela’s 503B pharmaceutical products. 

Additionally, they will also be able to bolster domestic drug production. 

Participating health systems include Baystate Health, Genesis Health System, Henry Ford Health System, McLaren Health Care, Memorial Healthcare System, OSF Healthcare, Riverside Health System, Saint Francis Health System, Texas Health Resource, and Universal Health Services. 

“Both Exela’s commitment to, and track record of, addressing drug shortages as well as its experience in supplying 503B compounded products make them an ideal partner for Premier and our members,” Andy Brailo, chief customer officer at Premier, said in the announcement. 

“Their ability to quickly provide vital medications can help to address moment-in-time market imbalances, including spot, regional and emergency-related shortages,” Brailo continued. 

Drug shortages have been a long-standing issue in the US, which has led to sub-optimal patient outcomes and nearly $230 million in additional annual drug costs. The COVID-19 pandemic alone has expanded the pharmaceutical sourcing challenge as overseas manufacturing and export bans have left providers failing to secure basic, life-saving therapies for patients. 

Exela primarily sources active pharmaceutical ingredients from the US and Europe and manufactures finished-dose products in its recently expanded manufacturing facility in North Carolina.

The expanded manufacturing gives Premier and its members a unique opportunity to boost the supply of critical pharmaceutical products.  

“Leveraging Exela’s significant production capacity, this collaboration is expected to give Premier’s participating members uninterrupted access to high-quality, U.S.-made pharmaceutical products and safety stock,” said Michael J. Alkire, president and CEO of Premier. 

“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,” Alkire continued. 

Premier’s partnership with Exela builds on the company’s previous efforts to address supply chain challenges and drug shortages. 

For example, Premier and 15 leading health systems acquired a minority stake in Prestige Ameritech, the largest domestic manufacturer of face masks, including N95 respirators and surgical masks. 

Premier did not disclose the financial transaction details with Exela.