American Society of Hematology

Congressman Cummings Investigates Marked-Up Prices of Drugs in Short Supply

Published on: October 14, 2011

Representative Elijah Cummings (D-MD-7th), a ranking member of the U.S. House of Representatives' Oversight and Government Reform Committee, launched an investigation into the prescription drug "gray market" — where companies sell critical medications that are in short supply at exorbitantly marked-up prices — part of a recent congressional focus on drug shortages.

Representative Cummings requested information from five companies that sell drugs but do not manufacture them or treat patients. He said a preliminary investigation found that some companies charge drug prices dozens of times higher than the typical price negotiated with manufacturers and distributors. The companies are Allied Medical Supply Inc., Superior Medical Supply Inc., Premium Health Services Inc., PRN Pharmaceuticals and Reliance Wholesale Inc. An August analysis from Premier Inc., a health-care alliance, found that the average markup for gray-market drugs was 650 percent — and higher for drugs needed for cancer treatments and heart conditions. Representative Cummings asked the five companies how they obtain the drugs, how much they pay for them and how much they profit by selling them. He also asked for information on all company gross revenues, net profits, executive compensations, and labor and equipment costs.

Representative Cummings requested responses from the companies by October 19, 2011. ASH will keep members apprised of the outcome of the investigation on the ASH drug shortage site, which also includes information about ASH's advocacy efforts related to drug shortages, the latest information on hematologic drug shortages, and resources for physicians.

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