Hospitals buying back door prescription drugs due to shortages « Health Insurance Advisory

Hospitals buying back door prescription drugs due to shortages

Author: Pete S - Sr. Staff Writer | Aug 28 2011 | Prescription Drug Card

New survey shows that half of hospitals are buying back door prescription drugs or “gray market” drugs.  The desperation is being fueled by growing shortages which has increased demand for ‘gray-market’ medications.

Fifty-two percent of hospital purchasing agents and pharmacists reported they’d bought drugs from so-called “gray market” prescription drug vendors during the previous two years, according to a just-released survey of 549 hospitals by the Institute for Safe Medication practices, an advocacy group.

Gray-market prescription drug suppliers are those that operate outside official channels, often buying drugs from uncertain sources and reselling them at a steep profit. A report issued last week by a one hospital association found their average mark-up was 650 percent.

Pressures from demanding doctors and desperate patients helped fuel the transactions, making hospital staffers feel like they had no choice but to buy drugs in short supply at steep prices.

“Our physicians don’t want to hear that a drug is ‘unavailable,’” wrote one hospital pharmacist who submitted comments to the anonymous survey.

More than half of respondents to the ISMP survey, some 56 percent, said they were bombarded daily with solicitations from up to 10 gray market vendors, with requests coming by phone, e-mail and fax. About a third of respondents from critical access and community hospitals who had purchased drugs from gray-market sources said they paid at least 10 times the contract price for the medications.

“I think it is criminal that pharmacies are ‘held hostage’ to these scalpers who charge excessive fees to obtain critically needed medications,” one hospital staffer commented in the survey.

The new focus on gray-market suppliers comes amid the worst drug shortage in U.S. history. Last year, 211 vital drugs were reported in short supply, according to the University of Utah Drug Information Service. As of July 31, 180 drug shortages have been reported this year, with estimates that number could double by the end of 2011. Most are drugs to treat cancer, sedate patients during surgery or treat critically ill patients during emergencies.

Federal Food and Drug Administration officials have struggled with the shortages. The agency has no power to compel manufacturers to make certain drugs, or even to inform health care providers in a timely manner. The agency says the shortages are caused by a variety of factors, including manufacturing problems, raw materials shortages, firms that simply stop making drugs and overall production delays.

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