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Bill introduced to reform sales of scarce medicine

A Congressman investigating wholesalers accused of jacking up prices of crucial prescription drugs in short supply on Tuesday introduced a bill meant to curb the problem.

Rep. Elijah E. Cummings, D-Md., is proposing reforms meant to deter price-gouging and make the drug supply chain safer — issues that are part of the complex problem of shortages.

For the past few years, record shortages of crucial medications heavily used by hospitals have been disrupting care, driving up costs and endangering patients, leading to some deaths.

The problems have forced doctors to postpone chemotherapy and surgeries and provide some treatments that are less effective and have worse side effects. Patients have had to endure more pain, preventable complications and longer hospital stays.

Most of the drugs that are unavailable or hard to find are normally cheap, generic injectable drugs, including sedatives for surgery and powerful antibiotics and painkillers.

Many of the shortages have been caused by manufacturing shutdowns due to contamination and other serious problems. Other reasons include increased demand for some drugs, companies ending production of low-profit medicines, consolidation in the generic drug industry and limited supplies of some ingredients.

A press release from Cummings, who is the ranking Democrat on the House Committee on Oversight and Government Reform, said “unscrupulous gray market wholesalers” have been buying scarce drugs from pharmacies to “charge excessive markups and divert drugs away from patients who need them.”

Cummings’s bill would prohibit wholesalers, which normally purchase medicines from manufacturers and re-sell them to hospitals and pharmacies, from buying drugs from pharmacies. It also would require wholesalers selling any critical drugs that are in short supply to list a drug’s selling price in its pedigree, a document listing each company that has handled the product, so buyers can see each middleman’s markup.

The bill also would create a national database to which wholesalers would have to report the status of their state licenses or face penalites. State regulators would report license revocations and disciplinary actions to the same database, so medical providers, consumers and state regulators could spot problems.

“Nobody should be allowed to engage in profiteering at the expense of children and adults with cancer or other critical illnesses by jacking up the price of drugs that are in critically short supply,” Cummings said in a statement. “This bill closes down loopholes in the supply chain.”

Cummings and other members of Congress have been investigating dozens of wholesalers, looking at where they purchase drugs in short supply and what they pay. The majority of pedigrees the investigators have examined indicate wholesalers are snapping up drugs from pharmacies, then offering them to hospitals at big markups. In a few cases, people appear to have set up sham pharmacies just to buy scarce drugs and then re-sell them at a big profit.

Cummings and Sen. John D. Rockefeller, chairman of the Senate Committee on Commerce, Science and Transportation, aim to report on the investigation this summer. A Commerce Committee spokesman said Rockefeller has yet to decide whether to introduce a Senate version of the Cummings bill.

A funding bill for the Food and Drug Administration, set for votes by the full House and Senate in the next couple weeks, includes some provisions aimed at easing other aspects of the shortages. A Cummings staff member said it’s possible some of his bill could get incorporated in the funding bill.

Meanwhile, increased efforts by the FDA to get manufacturers to notify it of impending shortages have been paying off; reports of new shortages have fallen significantly this year.

There are now shortages of 280 drugs, including 78 new shortages reported between January and mid-May, according to Erin R. Fox, manager of the University of Utah Drug Information Service, which tracks national drug shortages. Last year, there were 267 new shortages reported, adding to a couple hundred shortages persisting from earlier years.