Drug Shortages Pave Way for Price 'Gougers'

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Some U.S. drug manufacturers try to keep their drugs off the "gray market." Debra Lynn Ross, a spokeswoman for drug manufacturer APP Pharmaceuticals, said the company only deals with authorized wholesalers and distributors. She said APP has started shipping drugs directly to hospitals and clinics to discourage stockpiling and reselling by gray-market vendors.

Hospitals have struggled to adjust to the drop in drug supplies. For some drugs, there may be equally effective alternatives that doctors can substitute in treatments. But other drugs have few options. Stice said when supplies of some drugs get too low, nurses and pharmacists mix drug doses in smaller sizes than usual, potentially decreasing waste when a medication is stopped early or changed.

Jeffrey Smerage, medical director of infusion at the University of Michigan Comprehensive Cancer Center, said doctors there have had to make hard choices about which patients get the most effective drugs. "None of those decisions are fair or easy, but we had few options," he said.

Alkire said it's hard to determine how these distributors get access to drugs to sell at increased prices in the first place. The "gray market" is a complex web of transactions in which medicines are bought and sold across state lines, moved in whole or partial lots, repackaged and relabeled, making it nearly impossible to determine where the supplies came from or how authentic they are. "No easy solution exists to address the problem," Alkire said.

Premier recommends that hospitals and pharmacists take precautions in dealing with drug vendors, such as checking that the vendor is a licensed, authorized distributor of the drug, and to report suspect suppliers to authorities.

But Michigan's Smerage said the best way to deal with price-gouging vendors is to fix the dwindling supplies of drugs.

"In the end, you wouldn't have a gray market and you wouldn't have markups if there wasn't a drug shortage," he said.

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