Price Gouging Spikes Drug Costs Up to 4500%, Purchasing Group Says
Unscrupulous companies are engaging in price gouging of scarce, life-saving drugs on the so-called "grey market," with markups averaging 650% but as high as 4,500% before they even get to the hospital.
Those are among the findings of Premier Healthcare Alliance, a quality improvement and purchasing organization with 2,400 hospital and other provider members. Premier spoke about its report on the findings in a briefing with U.S. Senators Amy Klobuchar, (D-MN) and Richard Blumenthal, (D-CT) and Bona Benjamin of the American Society of Health System Pharmacists.
Five years ago, such high markups were seen in sales of only about 50 drugs. But now industry representatives say 170 essential medications were exploited in 2010 and expect as many as 360 on the list by the end of 2011.
Mike Alkire, chief operating officer of Premier, said the practice they've uncovered represents "a growing trend of price gouging efforts by grey market vendors (who are) attempting to capitalize on the desperation of pharmacies directors within hospitals and other buyers who are finding it increasingly difficult to secure sufficient supplies of the drug needed to meet patient care needs."
A recent American Hospital Association survey of 820 hospitals across the nation found that almost all of them reported a drug shortage in the last six months.
Alkire added that, "Considering the nation's budget crisis and our skyrocketing healthcare bills, these markups are nothing more than profiteering at the expense of patients and providers who are struggling to afford vital medicine to provide great patient care...taking advantage of our most vulnerable citizens."