Boulder County hospital pharmacy directors say they have felt the effects of the national prescription drug shortage, but luckily their patients have been spared from serious impacts so far.
Karen Monserud, pharmacy director at Boulder Community Hospital, says that while her pharmacy has not completely run out of any medicines, her staff monitors a list of about 50 drugs that are in limited supply.
She says BCH deals only with reputable distributors, not the gray market, and it has never done business with Superior Medical Supply in Westminster, one of a handful of alleged graymarket distributors asked to provide documents as part of a congressional investigation.
“I don’t believe the gray market caused the shortage,” Monserud says. “The gray market is taking advantage of the situation.”
John Ives, director of pharmacy services for Longmont United Hospital, says he sees the biggest shortages in injectable, generic drugs that need to be kept sterile, and while he says the primary problem lies with manufacturers’ business decisions and manufacturing problems, the gray market is a contributing factor.
“The gray-market companies are also a problem,” he says. “They certainly don’t help. But it’s much bigger than the gray-market companies, because it’s much more of a big-business financial decision.”
According to Ives, the number of manufacturers that make these types of drugs has dwindled, in some cases to one or two, because they pick and choose what medicines make the most profit. Often, he says, when a market is already cornered by a couple of companies, other manufacturers focus their attention elsewhere.
So when one drug-maker is shut down for not meeting U.S. Food and Drug Administration policies or some other reason, it can be devastating for providers, because they are left with little to no choice.
Hospitals get many drugs from a single distributor that carries a variety of medicines, Ives says, so when one drug’s manufacturer gets put on hold, the hospital sometimes has to contract directly with a second manufacturer for that substance, which can drive up prices.
“If we have to order 2,000 drugs from different companies, we’ve got trouble,” he says.
Ives says the gray market just exacerbates the situation.
“They’ve always been out there, doing what they do,” he says. “And what they do is look for drugs that are short and buying them up, and sometimes they’re buying them up before the drugs are short, with the hope that they will become short at some time so they can turn them around at a profit.”
Asked about Superior Medical Supply, Ives says he’s heard of the company.
“You’re not going to get them to talk,” he says. “What they’ll say is they’re providing a service to the medical community, but in reality, they’re not, because they’re perpetuating the shortage by buying them up, and then they hold us ransom at higher prices when these drugs are short, and so I see no value to the service that they provide.”
Ives adds that the extra layers that the gray market contributes to the distribution system simply increases the chances that “counterfeit” drugs will be provided to patients. In the sanctioned supply chain, medicine should go from the manufacturer to an authorized distributor to the pharmacy. But he says there are some “unscrupulous pharmacies and medical providers” that will sell the drug to third parties somewhere within the supply chain.
Ives says one example of counterfeiting a liquid drug is to refill bottles with water and glue the lids back on.
He says Longmont United has purchased medicine from the gray market in the past, but discontinued that practice due to the fear of counterfeit drugs. He says, however, that Longmont United does “sell drugs back and forth” with local facilities like Boulder Community Hospital, because it increases the chances that it can get the prescriptions it needs for patients.
Ives says it would be a hard call to make if a patient were facing death and no reputable distributor had the drug he or she needed. If he had to go elsewhere for the medicine, he says, he would make sure the distributor was statelicensed by the Board of Pharmacy, and he’d inspect the drug’s “pedigree,” which is the documentation of the substance’s distribution history.
“But the problem is, those pedigrees can be fake,” Ives says.
The increased costs of going with a secondary manufacturer — or a gray market distributor — drives up prices for the consumer, although so far, Ives says, Longmont United has been eating those costs.
But he acknowledges that somewhere down the line, after hospitals and pharmacists increase the amount they bill to insurance companies, the patients pay.
“At some point, the hospitals have to pass those costs on,” Ives says. “At some point, I would say, it is contributing to an increase in overall costs. What it’s doing is it’s increasing the overall cost of health care, and so somebody’s paying that bill. It’s the consumer. It’s health insurance companies, and they pass that on with higher premium costs.”
