Task force to NABP: Fix drug diversion problem

June 18, 2001

A task force has recommended that the National Association of Boards of Pharmacy's take actions to combat drug diversion through institutional outlets.

 

COMMUNITY PRACTICE

Task force to NABP:
Fix drug diversion problem

The National Association of Boards of Pharmacy should begin to combat the public safety problems associated with drug diversion through institutional outlets, according to a recent report from a task force appointed last year to examine the issue.

The task force looked at the drug diversion that occurs when manufacturers give deep discounts to institutional outlets, such as nursing homes and closed-door pharmacies. Closed-door pharmacies, which do not serve walk-in customers, then turn around and sell the products for a significant profit to entities not entitled to the discounts, such as community pharmacies.

It's estimated that between 50% and 80% of closed-door pharmacies participate in such diversion schemes. Some closed-door pharmacies are not really pharmacies at all but are established solely to purchase and resell discounted pharmaceuticals, according to the task force.

Deep discounts, up to 99% in some cases, create a secondary outlet—the so-called gray market—for drugs. Such diversion "has been found to be an extensive enterprise affecting the safety, quality, cost, and availability of those products to consumers, thereby endangering the public health and welfare," said the NABP resolution that created the task force.

The most graphic recent example of the gray market at work was last year's influenza vaccine shortage. Hospitals and clinics couldn't get supplies through the normal distribution channels, but gray market distributors were able to obtain the vaccine and proceeded to push the price through the roof. Some pharmacists have also reported similar offers for albuterol inhalers, which have been scarce in some areas.

It's time for NABP to push for legislative and regulatory changes to close loopholes in the Prescription Drug Marketing Act (PDMA) of 1987, according to the task force report. The PDMA generally prohibits the sale, purchase, or trade of prescription drugs by hospitals or healthcare entities. The closed-door pharmacies argue that they are not healthcare entities and therefore aren't covered by the PDMA prohibition.

The NABP Model State Pharmacy Act and Model Rules should also be revised by the NABP Committee on Law Enforcement & Legislation to combat diversion. The model regulation should include a 10% limit on sales by pharmacies and by wholesalers to other wholesalers. The goal is to cap the number of legally allowable transactions to limit diversion.

The task force's other recommendations include the following:

  • NABP should survey the states to determine the total number of closed-door pharmacies that are licensed.

  • NABP should encourage the states and the Food & Drug Administration to place more responsibility for drug distribution on pharmaceutical manufacturers and authorized wholesalers when distribution or sales patterns are outside what can be considered ethical and reasonable or expected.

  • All states should require all nonresident wholesale distributors to be registered with the state board of pharmacy if the wholesaler ships products into the state.

  • NABP should open discussions with other pharmacy groups about drug diversion and its impact on public health. NABP should also educate pharmacists, patients, other healthcare professionals, legislators, and other entities involved in drug distribution and dispensing about activities that could be illegal and dangerous to the public health.

  • NABP should begin discussions with pharmaceutical manufacturers to revise their pricing policies to address the public health issues and eliminate practices that encourage diversion.

Carol Ukens

 



Carol Ukens. Task force to NABP: Fix drug diversion problem.

Drug Topics

2001;11:23.