Senators call for FDA hearing on drug shortages and gray-market markups

August 16, 2011

Soon after a report revealed an average 650% markup on "gray-market" drugs, which are used when there is a shortage of other drugs, U.S. senators called for an FDA hearing on drug shortages.

Soon after a report revealed an average 650% markup on “gray-market” drugs, which are used when there is a shortage of other drugs, U.S. senators called for an FDA hearing.

Premier Healthcare Alliance, a nonprofit alliance of hospitals and operator of a healthcare purchasing network, shared new data on drug-shortage markups during a media briefing earlier this week. Also during the briefing, an official with the American Society of Health System Pharmacists (ASHP), Sen. Amy Klobuchar (D-MN), and Sen. Richard Blumenthal (D-CT) spoke out about price gouging of secondary drugs that are being offered to hospital pharmacists during drug shortages.

Premier collected 1,745 unsolicited gray-market sales offers made to its member hospitals throughout April and May of 2011. Of these offers, the 636 that contained both price and proper drug identification information were analyzed. Of the drug markups, 96% were at least double normal price, 45% were at least 10 times their normal price, and 27% were at least 20 times their normal price, according to Premier.

The highest markup was a 4,533% increase on a drug used to treat high blood pressure. The drug, which would normally be priced at $25.90, was offered to a hospital for $1,200. “Often, gray-market vendors will take advantage of the desperation of hospitals, pharmacists, and others and … hospitals are forced to pay the price,” Klobuchar said.

As a result, Klobuchar and Blumenthal, along with other senators, have formed a bipartisan group to work on the issue of drug shortages and the gray market. At their request, the FDA will hold a hearing on the matter September 21, and the General Accounting Office will review the problem. “This is unacceptable. The response of the federal government has to be upgraded,” Blumenthal said.

In addition, Klobuchar and Sen. Bob Casey (D-PA) have introduced legislation to require drug manufacturers to give “proper prior notification” to FDA when there is going to be a drug shortage, Klobuchar said.

After spending hours attempting to obtain supplies of certain drugs with little success, hospital pharmacists are frustrated, as they are by receiving offers from suppliers that are “egregiously marked up,” said Bona Benjamin, director of Medication-Use Quality Improvement and coordinator of the Drug Shortages Web Resource Center for ASHP.Fifty oncology drugs alone were short in 2010 and 2011, Benjamin saidd. “It is a very serious crisis, with a high priority of action for ASHP,” Benjamin said.