650% price hikes for prescription drugs, White House confronts gouging

By  Charlene Smith

Washington, D.C. – A trebling of prescription drug shortages over the past five years is seeing price gouging for some essential medications, the White House has revealed.

It gave examples:

* “The ranking member of the House Committee on Oversight and Government Reforms, when announcing his investigation into so-called gray markets, expressed concerns about a report that a leukemia drug whose typical contract price is about $12 per vial was being sold at $990 per vial – 80 times higher.  

*  "A Premier healthcare alliance report released in August estimated that the typical gray market vendor marks up prices by an averaged 650 percent.  

*  "A drug used to treat high blood pressure that was normally priced at $25.90 was being sold at $1,200 due to a drug shortage.” 

It noted that, “the number of reported prescription drug shortages in the United States nearly tripled between 2005 and 2010. While FDA successfully prevented 137 drug shortages between January 1, 2010 and September 26, 2011, prescription drug shortages continue to threaten the health and safety of the American people." 

President Barack Obama said: “I am directing my administration to take steps to protect consumers from drug shortages, and I’m committed to working with Congress and industry to keep tackling this problem.”

He signed an Executive Order directing the Food and Drug Administration (FDA) to broaden reporting of potential shortages of certain prescription drugs and to expedite regulatory reviews. Under the President’s order, FDA will work with to the Department of Justice, to examine whether potential shortages have led to illegal price gouging or stockpiling of life-saving medications.

Currently, the FDA can only require drug manufacturers to disclose the discontinuation of a critical drug when the drug is available through a single manufacturer. The President’s Executive Order directs the FDA to take additional steps to require drug manufacturers to provide adequate advance notice of manufacturing discontinuances or other actions that could lead to critical shortages.