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Senate Committee Focuses on Impact of “Gray Market” on Drug Shortages

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In a hearing last week, the U.S. Senate Committee on Commerce, Science, and Transportation examined the effects of the “gray market” where drugs in short supply are resold at inflated prices.

The hearing coincided with an ongoing bicameral effort by Committee Chairman Senator Jay Rockefeller (D-VW), Senate Health, Education, Labor and Pensions (HELP) Committee Chairman Tom Harkin (D-IA), and House Oversight and Government Reform Ranking Member Elijah Cummings (D-MD) to study the impact of gray market transactions on the cost of shortage drugs to health care providers.

Senator Rockefeller highlighted the problem of third parties who purchase supplies of shortage drugs and sell them to providers at inflated prices. “By the time the gray market has done its work, a cancer drug that originally cost $10 to $12 has become a drug that costs $500 or even $1,000.”

While members of Congress on both sides of the aisle recognize price gouging as a problem, there is lack of consensus on how to move forward. Congress instructed the Government Accountability Office (GAO) in the recently enacted Food and Drug Administration user fee bill (S. 3187) to study the effects of stockpiling and inflating drug prices and make recommendations for additional reporting or enforcement requirements that may be necessary to address these issues.

Responding to the concerns of the health care community, including HANYS’ members, Senator Charles Schumer (D-NY) has been working to draw attention to the issue of price gouging in New York State and HANYS is grateful for his leadership on this issue. Contact: Chelsi Stevens

Published July 30, 2012