Study: Drug Shortage Linked To Price Gouging

Prescription drug shortages are leading to price gouging and hospitals and doctors are feeling the pinch, according to a new study by North Carolina based medical research organization Premier Healthcare Alliance.

So-called gray markets have become increasingly powerful, according to the study.

The U.S. Food and Drug Administration said at least 180 drugs are in short supply — many of them used for critical care, and in some cases, the price markups are delaying surgeries.

The gray market is made up of vendors who operate through back channels.

More than 240 drugs are either in short supply or completely unavailable, according to the study.

Gray market vendors know this, and take advantage of the medicinal drought by buying the meds in bulk, and then sell them to doctors and hospitals in desperate need of them.

“They have squeezed the profit out of the practitioners, away from the pharmacist,” said Mort Farina, owner of the Town and Center Compounding Pharmacy in Palm Desert.

The majority of the drugs in short supply are needed for sedation, emergency care and chemotherapy.

The research finds that the average mark-up is 650 percent, but in some cases, prices were much higher.

The most outrageous being labetalol — it’s a blood presure medication, considered in short supply for at least a year.

It normally sells for $25.90, but on the gray market, it’s being sold for $1,200, which is a 4,533 percent increase.

Sodium chloride concentrate, used in critical care, is seeing a 2,350 percent increase, and propofol, the anesthetic found in pop singer Michael Jackson’s system at the time of his death is seeing a whopping 3,161 percent increase.

“In our pharmacy, because we’re a clinical compounding pharmacist, if there’s a medication that we don’t have, that’s not available from one of our suppliers, we can just make it up,” said Farina, whose team of pharmacists specialize in custom making prescriptions.

But Farina has been in the industry for decades, and said the gray market is spiraling out of control.

“People are looking to find ways of buying things less expensively, so they can make a profit on their prescriptions,” said Farina.