Grey Market Drives up Prescription Drug Prices

By Rebecca Jones

As the nation faces one of the worst prescription drug shortages in its history unscrupulous middle men are stockpiling life saving medications only to sell them to hospitals at up to 50 times their normal price. To make matters worse this practice is 100% legal.

Already this year 180 medications have been declared in short supply and it’s anticipated to only get worse. According to the American Hospital Association nearly every hospital in America is suffering from these shortages on drugs used for everything from treating cancer to anesthesia, to treating high blood pressure or performing surgery and 82% report that these shortages are delaying patient treatment. Already patients are travelling hours from home to find the medications they need and some worry that life saving cancer treatments will be interrupted mid course; for many this could truly be a matter of life and death.

There are many reasons for the current drug shortages but most have to do with the way drugs are manufactured, stored and of course how much money is to be made from making them. Most of the medications that are in short supply are generic liquid medications. These are complicated to make and require much more careful storage and handling than pills and powder medications. With such little profit to be made on older generic drugs there tends to be fewer manufacturers for each medication and with many of the raw materials coming from oversees delays and quality control issues are common.

As it stands right now drug manufacturers are not required to notify the FDA that they are experiencing shortages or delays, making it extremely difficult to plan for these shortages ahead of time. While they are encouraged to keep the FDA updated about production difficulties they are only legally required to make contact if they plan to discontinue manufacturing a life saving medication for which they are the sole supplier.

While the FDA is working on ways to keep production flowing; approving new raw materials and asking competitors to increase production when one company can’t keep up with demand, they cannot force a company to produce a drug that causes them to lose money no matter how many lives are at stake. They have also been accused of contributing to the problem by requiring manufactures of drugs approved decades ago to apply for new applications a process that is cost prohibitive to the point where many would rather just stop production entirely.

As drug shortages get worse the profiteering and markups promise to get worse as well.   With the so called grey market hoarding medications and gauging prices many will be left wondering how they will get the life saving treatments they so desperately need.