A gray market of secondary pharmaceutical suppliers is driving up the price of lifesaving drugs that are in short supply, with markups ranging from 100% to 4,500%.
An analysis released Aug. 16 by the Premier Healthcare Alliance found that, on average, drugs are being marked up 650% on the gray market. Premier compiled and analyzed 636 unsolicited sales offers received by acute care facilities in its network. All of the drugs offered were either back-ordered or unavailable through the manufacturer. While the average markup for these drugs was 650%, the top 10 highest markups were more than 1,000% over base contract prices.
The top 10 highest markups were seen in pharmaceuticals used in cardiology, sedation, critical care, and oncology:
• Labetalol – 4,533%
• Cytarabine – 3,980%
• Dexamethasone 4 mg injection – 3,857%
• Leucovorin – 3,170%
• Propofol – 3,161%
• Papaverine – 2,979%
• Protamine sulfate– 2,752%
• Levophed – 2,642%
• Sodium chloride concentrate – 2,350%
• Furosemide injection – 1,721%
Gray market vendors generally advertise drugs through e-mails and faxes that tout the shortage of the products, Premier officials said, with language such as "we only have 20 [units] of this drug left and quantities are going fast."
The reported price gouging comes as the country faces an unprecedented shortage of drugs. By the end of 2011, there could be more than 360 drugs in short supply, according to projections by Premier.
Hospitals and pharmacies must beware when purchasing drugs on the gray market, not just because of the inflated price but also because of safety risks, Premier officials warned. Products sold on the gray market may have been mishandled, rendering them ineffective or harmful; they also could be counterfeit or diluted.
Stolen, counterfeit, and mishandled drugs are also difficult to recognize. Even the original manufacturers may not be able to spot fake drugs, according to analysts for Premier. And hospitals that try to avoid gray market vendors may encounter problems because these vendors have sophisticated methods of impersonating legitimate, licensed distributors, according to Premier.
Drug shortages are also getting increased attention in Washington, where a bipartisan group of senators has been urging the Food and Drug Administration to do more to address these shortages. The FDA will hold a public meeting on the issue on Sept. 26.
Sen. Amy Klobuchar (D-Minn.), a member of the bipartisan group, told reporters on Aug. 16 that one short-term solution would be for drug manufacturers to alert the FDA to any problems that could result in a drug shortage; she is sponsoring a bill (S. 296) that would require manufacturers to do so.
This would allow the FDA to begin looking across the United States and overseas for alternative drugs before a shortage occurs, Sen. Klobuchar said, adding that a range of options needs to be on the table to address drug shortages and the price gouging coming from the gray market.
"I don’t care how much fighting is going on in Congress," she said. "I don’t think anyone wants to be responsible for a little kid dying because he doesn’t get a cancer drug because we haven’t been able to figure out the bureaucracy of this."