Hospitals across the U.S. are facing shortages of crucial drugs and have had to turn to “gray market” drug suppliers to secure the needed supplies. However, these drugs are often marked up several hundred percent.
Markup on drugs in short supply a national outrage
To combat a shortage of drugs, hospitals have had to give less to patients and possibly compromise care or turn to “gray market” suppliers. The Food and Drug Administration, according to USA Today, has listed at least 180 drugs as being in short supply this year. Last year, according to Today, the University of Utah found that 211 drugs were in short supply among hospitals. The University of Utah also, according to the Atlanta Journal-Constitution, is predicting that there will be a shortage of 360 or more medications by the end of this year. Hospitals recorded 31,180 drug shortages in 2010, according to the University of Utah. To counter the short supply of medications, many of which are drugs used in chemotherapy, anesthesia and other vital medications, hospitals are turning to suppliers outside the typical channels.
Study finds increasing reliance on shady suppliers
According to MSNBC, a survey by the Institute for Safe Medication practices found that 52 percent of hospitals and pharmacists in the survey reported using “gray market” suppliers in order to secure needed medicines. Gray market suppliers buy medication from whichever suppliers offer the drugs and then sell the drugs to hospitals. While not technically illegal, it is frowned upon because the products aren’t verified before being sold to hospitals. They also are sold at a steep markup. The same survey also found that one-third of respondents who had bought gray market drugs paid 10 times what they normally paid. According to Fox News, a study by the Premier Healthcare Alliance found the average markup on grey market drugs was 650 percent. However, some individual medications are marked up far more than that. Labetalol, a blood-pressure medication, was marked up to $1,200 from $25.90 in the Premier study, according to Today, a markup of 4,533 percent.
Problem will continue until supply crisis ends
According to the New York Times, Premier executives looked at offers from gray market suppliers and found that out of 636 offers that included prices, 45 percent were 10 times normal price. A further 27 percent were 20 times list price. Congress and the FDA are holding hearings and discussing strategies to curb drug shortages and gray market prescription drug trafficking, but there are problems in resolving supply issues. According to CBS, many drug producers lack the production capacity to meet demand, and raw materials are sometimes difficult to secure. Legislation has been introduced, according to USA Today, that requires drug makers to notify the FDA six months in advance of a possible drug shortage. According to the New York Times, early notification of a possible shortage prevented a shortage from occurring 38 times last year.
Sources
Today: http://today.msnbc.msn.com/id/44167386/ns/today-today_health/t/price-gougers-hike-costs-vital-drugs-during-shortage/#.TlfC2mWP-_0
Atlanta Journal-Constitution: http://www.ajc.com/opinion/gouging-threatens-supply-of-1121660.html
Fox: http://www.foxbusiness.com/personal-finance/2011/08/19/gray-market-drugs-sold-at-sky-high-prices/
USA Today: http://yourlife.usatoday.com/health/healthcare/story/2011/08/Drug-shortages-lead-to-price-gouging/50028148/1
CBS: http://www.cbsnews.com/stories/2011/08/20/earlyshow/saturday/main20094949.shtml
MSNBC: http://www.msnbc.msn.com/id/44280296/ns/health-health_care/#.Tle-_mWP-_0
New York Times: http://www.nytimes.com/2011/08/20/health/policy/20drug.html?pagewanted=1&ref=opinion
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