As the number of medicines in short supply in the US hits around 200 in 2011 so far – compared with the record 178 reported for the whole of 2010 – a leading Congressman has begun an investigation of “grey market” middleman companies, which charge exorbitant prices for prescription drugs in critically short supply.
Democratic Representative Elijah Cummings, a member of the House Committee on Oversight and Government Reform, has begun an investigation into the extent to which five such grey market companies are “making substantial profits by engaging in a form of drug speculation.”
He says he has been working with a network of hospital, pharmacy and government representatives on the problem, and has obtained confidential information about companies which are charging prices for short-supply drugs that are many times higher than those negotiated with authorised manufacturers and distributors.
Rep Cummings has written to five such companies – none of which manufactures drugs or treats patients – asking them how they are obtaining the drugs and how much they are making in profits by selling them to hospitals, pharmacies and health providers. The companies are:
– Allied Medical Supply Inc, which has offered cytarabine, used to treat leukaemia in children and adults, for over $990 per vial, more than 80 times a typical contract price of about $12 per vial;
– Superior Medical Supply Inc, which offered paclitaxel, used in the treatment of breast and ovarian cancers, for over $500 a vial, more than seven times a typical contract prices of around $65 per vial. Rep Cummings also notes that the California Attorney General filed a case alleging that the company “purchased, traded, sold or transferred dangerous drugs they knew, or reasonably should have known, were misbranded,” and that it “disseminated false, misleading or deceptive statements, claims or images via the Internet, to induce the rendering of professional services or furnishing of products;”
– Premium Health Services Inc, which offered leucovorin, used in combination with the chemotherapy drug fluorouracil to treat advanced colon cancer, for over $270 per vial, more than 50 times a typical contract price of approximately $5 per vial;
– PRN Pharmaceuticals, which offered fluorouracil, used to treat colon, stomach, breast and pancreatic cancers, for over $350 a vial, more than 23 times a typical contract price of around $15 per vial; and
– Reliance Wholesale Inc, which offered magnesium sulfate, used to control life-threatening seizures in pregnant women and to treat magnesium deficiency in patients who are receiving intravenous feeding, for over $400 for 25 vials. This is more than 40 times a typical contract price of approximately $9 for 25 vials.
“Price-gouging for drugs that treat cancer in children is simply unconscionable,” said Rep Cummings. “We want to know where these companies are getting these drugs and how much they are making in profits. Obtaining this information will help us develop concrete solutions.”
– A recent Food and Drug Administration (FDA) workshop heard that prescription drug shortages have now reached historic levels, and that the reported figures do not include shortages of vaccines, immune globulins or other biological products.
However, agency officials also told the meeting that they have been able to prevent at least 99 shortages this year so far, compared with 38 for the whole of 2010.
