Gray market thriving on drug shortages

Drug shortages, which have more than tripled in frequency since 2005, are taking their toll. Nationwide, supply shortfalls cost U.S. hospitals some $200 million annually via higher payments for substitutes.

Healthcare providers pay on average 11 percent more for products in short supply, says Premier, an alliance of healthcare providers. In a just published study, which encompassed 311 hospital pharmacy experts representing 228 member medical facilities and retail pharmacies, Premier finds more than 240 drugs either in short supply or unavailable during latter 2010. Many of the shortages identified in 2010 have remained into 2011. The study indicates the number is rising.

Gray market distributors have sprung into action, buying up available supplies and reselling them to providers at markups of several hundred percent. This supply chain diversion may threaten drug integrity in addition to fleecing caregivers.

The majority of drugs in short supply are substances for emergency care, sedation and chemotherapy. The acute-care sector suffers the biggest hit, sustaining 85 percent of drug-shortage financial impact in cases where equivalent generics are available. Infectious disease treatments and drugs used in surgery and to treat oncology and cardiovascular disease follow.

Workarounds include the delay or cancellation of medical procedures, the gray market purchases and the use of compounding pharmacies.

- here's the Premier release
- see the document (pdf)

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