NCPA - National Center for Policy Analysis

Backdoor Drugs

August 31, 2011

Amid growing reports of price gouging for life-saving drugs, half of hospital officials said they've bought medications from backdoor suppliers during recent drug shortages, a new survey shows, reports MSNBC.com.

  • Fifty-two percent of hospital purchasing agents and pharmacists reported they had bought drugs from so-called "gray market" vendors during the previous two years, according to a just-released survey of 549 hospitals by the Institute for Safe Medication Practices (ISMP), an advocacy group.
  • Gray-market 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 markup 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.

  • 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.

Gray-market suppliers take advantage of the ongoing shortages, monitoring drug availability and then exploiting the vulnerable supply chain, said Mike Cohen, president of the ISMP.  There are worries that the drugs may be of questionable quality, may not be handled properly, or may even be counterfeit or stolen.

Source: JoNel Aleccia, "Half of Hospitals Buy Backdoor Drugs, New Survey Shows," MSNBC.com, August 26, 2011.

For text:

http://www.msnbc.msn.com/id/44280296/ns/health-health_care/

For study:

http://www.ismp.org/Newsletters/acutecare/showarticle.asp?ID=3

 

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