Phony pharmacies tied to price gouging drug wholesalers


Rep. Elijah Cummings [D-MD]

Lawmakers are investigating three shadowy pharmacies in Maryland and North Carolina for diverting critical but scarce drugs from patients to wholesalers, who are then able to resell the medicine at sometimes big markups.

Elijah Cummings, the senior Democrat on the House Committee on Oversight and Government Reform, began a probe in October to discover why certain companies were selling cancer drugs at more than a hundred times their normal cost.

Shortages of hundreds of drugs including cisplatin, a highly effective treatment for testicular cancer, and fluorouracil for colon and other cancers have helped create a lucrative shadow market…

According to preliminary details of Cummings’ investigation, made public on Wednesday, some wholesalers opened their own sham pharmacies to obtain drugs in short supply and re-sell them. One wholesaler increased the price tenfold from the pharmacy cost.

“It’s shocking to the conscience that anyone because of their greed would deny medicines to patients, who are in many instances in critical condition,” Cummings said in an interview. “If it’s not illegal, we need to make it illegal…”

The inquiry found cases of the pharmacy and wholesaler being headed by the same person, or by a husband and wife pair

Most of the nation’s drug supply passes from manufacturers like Hospira Inc and Teva Pharmaceuticals to three leading wholesalers – AmerisourceBergen Corp, Cardinal Health Inc and McKesson Corp – who distribute them to doctors, hospitals, clinics and pharmacies.

Smaller distributors help fill in the gaps in areas where larger companies may not operate or cannot meet the full demand. In recent years, a new crop of small players has surfaced, as the problem of drug shortages has worsened.

“Any time there’s a severe shortage of some critically needed good, invariably there are going to be folks who seek to exploit that,” said Jay Campbell, executive director of the North Carolina Board of Pharmacy.

The sleaziest of the profiteers they’ve uncovered – so far – was Jessica Hoppe, the president of a drug wholesaler called International Pharmaceuticals. State regulators discovered Hoppe operated the pharmacy from her wholesale office in Durham, North Carolina.

Cripes. How and why would the Federal Trade Commission need new regulations to deal with hustlers like this?

2 thoughts on “Phony pharmacies tied to price gouging drug wholesalers

  1. D. Andrews says:

    I just retired after working in the wholesale pharmaceutical industry for the last 34 years. I have worked for both big wholesaler (McKesson) and small independent distributor and although I would love to give “my take” on the whole shortage issue, there isn’t the time or space so let me just comment on one point mentioned in this article. The unethical practice of a few bad apple wholesalers opening closed door (fake) pharmacies to gain access to these critically important life saving drugs in short supply is true. They will then peddle the drug at grossly unethical profit margins through their wholesale business by having telemarketing people call hospital pharmacies across the nation. It’s an easy sale at any price since virtually every hospital is desperate for these drugs. The need is often so critical, buyers don’t even ask the price. Most of these sales people work on commission and have no clue about ethics. They are like so many others these days, greedy. Again this is only one small part of a very big and nasty issue regarding drug shortages but it always pissed me off!

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