drug shortages

Pharmaceutical price gouging isn’t illegal, it is sleazy — and potentially dangerous.

You can be arrested for scalping tickets to a rock concert.  But reselling lifesaving medications at a hefty markup is a thriving business.


With the nation in the midst of a record shortage of prescription drugs — including vital medications used in everything from surgery to chemotherapy — unscrupulous marketers are stockpiling hard-to-find drugs and attempting to sell them back to hospitals at up to 50 times their normal prices, a new report says.

While pharmaceutical price gouging isn’t illegal, it is sleazy — and potentially dangerous, says Mike Cohen,of the Institute for Safe Medication Practices, which is conducting research on the “gray market” for prescription drugs.

Hospital pharmacists get daily phone calls, faxes and e-mails from eager salesmen looking to solve their shortages — for the right price, says Jennifer Reddan, director of drug policy at Indiana University Health System in Indianapolis.

At a time when legitimate wholesalers can’t find drugs for their customers, fly-by-night vendors are asking hospitals to pay an average of 6.5 times the normal price for a drug, according to a report released this week from Premier health care alliance, a Charlotte-based quality improvement group.

A blood pressure drug called labetalol, for example, usually costs $25 a dose. This year, hospitals have been asked to pay $1,200, says Premier’s Mike Alkire.

Hospitals often refuse . But even those that deal with reputable vendors are paying an average of 11% more for hard-to-find drugs, spending an extra $200 million a year, found a March survey from Premier.

This year alone, the Food and Drug Administration has listed 180 drugs in short supply. Hospitals have responded, in some cases, by delaying surgeries or turning to less-effective drugs.

“Instead of trying to help, there are predators making it worse, charging more because they know they can,” says Sen. Amy Klobuchar, D-Minn., who has introduced legislation to require drugmakers to give the FDA six months’ notice of impending shortages. “This cries out for a solution.”

Price gougers find drugs in several ways, Cohen says. Some contact doctors’ offices, offering to buy back drugs the practice doesn’t need. Then, they try to resell them at huge markups.

The Healthcare Distribution Management Association condemns price gouging, says spokesman John Parker. The industry group representing pharmaceutical wholesalers and distributors handles 90% of all pharmaceutical sales in the USA, buying directly from manufacturers and delivering only to licensed health care providers. Its members “do not participate in the ‘gray market,'” Parker says.

Buying from unauthorized dealers can put patients at risk by circulating counterfeit or stolen medications, Alkire says. These drugs also may not have been stored and handled properly, which can render some medications ineffective or even dangerous, he says.

Drugmakers say they’re struggling to keep their products from ending up in the wrong hands.

Generic drugmaker Hospira makes its distributors sign contracts designed to keep products from being misused, says spokesman Dan Rosenberg. Hospira has stopped working with 12 distributors in the past two years after learning they were selling drugs to unapproved, unauthorized vendors.

Photo credit: My SA

Via USA Today