Buyers beware overpriced 'gray-market' drugs amid record shortage

With hospitals facing record-high drug shortages, facilities are seeking alternative (sometimes desperate) solutions, including postponing procedures, reverting back to older medications, or looking to foreign substitutions. As the short supply is expected to only get worse, hospitals should use caution before buying "gray-market" drugs--marked-up drugs offered in a parallel market.

In June, the U.S. Food and Drug Administration reported a record-high 178 drug shortages. Community hospitals especially have been hard hit with 99.5 percent reporting at least one drug shortage within the past several months.

Premier healthcare alliance yesterday released a report on ensuring that hospitals use legitimate drugs in their pharmacies. The report found there to be a particular demand for sedation, emergency care, and chemotherapy drugs.

In a two-week period, 42 acute care hospitals reported being offered gray-market drugs 1,745 times for items that were back-ordered from the manufacturer or simply unavailable, according to the report. The average mark-up was a stunning 650 percent on the original drug price.

Among the tips, the report recommends developing and maintaining a policy for purchasing decisions, then documenting exceptions to that policy. In addition to staff confirming the licenses of wholesalers, distributors, and suppliers, hospitals should keep records of suspicious organizations to warn other staff members in future purchases.

For more:
- read the H&HN column
- check out the report (.pdf)

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