Providers, patients, pharmacies can all work to stop drug-price gouging
After Hurricane Ike hit in 2008, cities across the Southeast faced a significant fuel shortage. At one point in Charlotte, N.C., only 1 in 7 gas stations was open with as many as 60 completely out of gas.
People were desperate to get the gas they needed to function and others tried to make a buck off the situation. Within days, state officials reported hundreds of cases of price gouging by profiteers who sought to capitalize off others’ misery. In some cases, prices more than doubled, hitting $7.30 a gallon!
The situation forced then-North Carolina Gov. Mike Easley to activate anti-gouging provisions, prohibiting stations from charging unreasonably high prices.
It’s no secret that healthcare is experiencing one of the most severe drug shortages in recorded history (Sept. 5, p. 8). A number of organizations, including the American Hospital Association, American Society of HealthSystem Pharmacists, University of Michigan Health System and Premier healthcare alliance, have found that the vast majority of hospitals are experiencing life-threatening shortages of medicines.
Shortages are getting so severe that, according to the University of Utah, 360 drugs will be unavailable by the end of the year, the highest number recorded. These include those used in chemotherapy, sedation drugs used to conduct surgeries and drugs needed to provide emergency treatments to heart attack patients.
We might hope that in this time of crisis, people would band together and do everything they could to help hospitals get the drugs they need, when they need them. Instead, some price gougers are using this shortage as an opportunity to enrich themselves, at patients’ expense.
Price gougers often obtain shortage medicines from quasi-legal sources, called “gray” markets. Also known as a parallel market, a gray market is a supply channel that is unofficial, unauthorized or unintended by the original manufacturer. They often crop up in markets where the products are scarce or in short supply. Capitalizing on the desperation of pharmacy directors and buyers who are finding it increasingly difficult to secure a sufficient supply of the needed drugs, these profiteers may be the only available source of supply.
But price gougers in healthcare are even more unconscionable than those after Hurri- cane Ike because they are taking advantage of some of our most vulnerable citizens. And it didn’t really matter where the North Carolina gougers got their fuel supply or how it was transported into the area. With medicines, those considerations are extremely important.
Modern medicines are highly sophisticated, requiring appropriate storage and handling and specific temperature or other controls to ensure safety and efficacy. This is why pharmaceutical distribution is highly regulated, with strict requirements to record the product’s chain of custody from manufacturer, to distributor, to pharmacy.
When price gougers emerge with shortage products, several questions emerge: Where and how are they getting medicines that no one else can? How can the integrity of these drugs be ascertained? Is it best practice—or even acceptable—to buy from these sources?
According to a Pew Health Group report, gray market drugs are often bought and sold across state lines, moved in whole or partial lots, repackaged or relabeled. These complex webs of transactions can make it almost impossible to determine the supply source or the product’s authenticity.
This adds insult to injury. Not only are pharmacies being asked to pay the price gouger’s premium, but in some cases, they can’t be sure that the medicine they’re buying is safe or even the real thing.
A key way to stop price gouging is for pharmacies to avoid doing business with gray market vendors. Close scrutiny is suggested of drugs from a new supplier, looking for legitimate exchange of product between points of sale to and from licensed distributors and buyers. And whenever a purchase is made from a new supplier, comparing and scrutinizing the product package, label and contents is essential. Patients can help, as they can often detect similar abnormalities.
Pharmacies should also refuse to do business with any organization that can’t verify its supply source and appropriate state licensure. Suspicious organizations can be reported to the Food and Drug Administration and state pharmacy boards.
Another solution is to address the drug shortages themselves. Consolidation of prescription drug manufacturers and unpredictable problems in obtaining raw ingredients can lead to shortages, but no one cause explains the issue altogether.
Likewise, no easy solution exists. Though a bipartisan group of senators is urging action, government cannot order the production of more drugs. They can work with manufacturers to give pharmacies advance notice of pending shortages, as well as ease some of the regulatory burdens of drug approvals and expedite quality inspections in emergency situations.
Whether gasoline or medication, it’s never acceptable to profit off of national crisis by engaging in price gouging. Considering the nation’s budget crisis and the possible threats to patient care, this type of action in healthcare is much more perilous.
Profiteering at the expense of citizens is not only unethical. It’s taking advantage of those who are struggling to afford and obtain something desperately needed to survive.