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Drug resellers probed for marking up scarce medicine 80-fold

BusinessWeek, October 6, 2011

Companies that buy up critical drugs in short supply and resell them to hospitals and pharmacies at a markup of as much as 80 times their price are under investigation by a U.S. lawmaker challenging the practice. While so-called gray-market resellers can offer life-saving drugs that are in low supply, they charge the typical contract price sevenfold on average, with some surgical and other medically critical treatments increasing 20-fold, according to a survey by the Premier Healthcare Alliance. Representative Elijah Cummings, a Maryland Democrat, launched the investigation as the U.S. faces record drug shortages. The scarcity is causing some hospitals to change medical practices and in some cases, use less-effective medicines, doctors and pharmacists say. Cummings said he found that one reseller charged a hospital 80 times the typical price for cytarabine, a pediatric cancer drug.