AP IMPACT: Hospital drug shortages deadly, costly

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The pitches hospitals get from secondary distributors generally say they have small batches of specific drugs that are hard or impossible to find. “Are you enjoying this crazy `roller coaster ride’ of pharmaceutical shortages? … I utilize over 60 vendors to locate and procure needed pharmaceuticals to assist when you have shortage needs,” one reads.

Several distributors who sent hospitals solicitations for scarce drugs didn’t return calls from the AP. One representative said he wasn’t authorized to discuss the issue.

Another company, Novis Pharmaceuticals, defended the higher prices, saying secondary distributors have to charge far more because they don’t get the big rebates manufacturers give primary distributors. They also have high costs to locate and transport batches of scarce drugs, although the company, which mainly distributes blood plasma, would not disclose its profit margin.

It’s illegal for companies to collude to create a medicine shortage and raise prices, and there’s no evidence of that. There’s no federal law against price-gouging on prescription drugs, according to the FDA, but it does urge pharmacists to report cases to its Office of Criminal Investigation. An agency spokeswoman said she could not discuss whether any cases are being investigated.

The top three wholesalers say they try to alleviate problems by working with drug manufacturers, updating hospitals on shortages and rationing scarce supplies by giving their regular hospital customers a portion of their normal order. McKesson Corp. and Cardinal Health Inc. say they halt sales to any smaller distributors found to be diverting drugs or otherwise breaking rules. AmerisourceBergen Corp. does background checks on customers.

The hospital association and other groups urge hospitals not to buy from unaccredited vendors, to insist on documentation of the drug’s source if they must, and to report price gouging to state authorities. But only three states _ Kentucky, Maine and Texas _ have price-gouging laws that specifically cover medicines.

“Something has to be done here,” said pharmacist Michael O’Neal, head of drug procurement for Vanderbilt University Medical Center in Nashville, which has had to purchase medicines from secondary suppliers about 70 times over the past two years.

“This is unethical,” he said. “We’re talking about people’s lives.”

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Summary of state price-gouging laws: http://www.ncsl.org/default.aspx?tabid14434

Institute for Safe Medication Practices consumer site: http://www.consumermedsafety.org/

Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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