By Meredith Cohn, The Baltimore Sun
7:38 PM EDT, October 5, 2011
University of Maryland women's basketball coach Brenda Frese said she was heartbroken that a chemotherapy drug used to treat her 3-year-old son, Tyler, for leukemia was in short supply and possibly unavailable.
When she discovered that some companies have been accused of putting profit over production or distribution of cytarabine and other drugs, she was angry — and she began writing letters.
"This is life or death, and the thought of some drugs being put out of reach made my stomach sick," she said in an interview.
One of her letters went to Rep. Elijah E. Cummings, the ranking Democrat on the House Oversight and Government Reform Committee, who has since joined a growing list of lawmakers and regulators looking into the shortages of many lifesaving prescription drugs, which have reached record highs in recent years.
After his staff investigated, collecting documents and information from several large-scale pharmaceutical buyers, Cummings now alleges that several companies are selling some drugs on the U.S. Food and Drug Administration's shortage list at huge markups. While not accusing the companies of wrongdoing, he sent his own letters Wednesday to five companies to request more information about the source of their drugs and their profits.
The companies — including one Cummings says is peddling the cancer drug cytarabine for $990 a vial, or 80 times its normal sales price — operate in a "gray market" that neither makes drugs nor treats patients. They are distributors who buy from manufacturers and sell to hospitals and pharmacies, though sometimes they also buy and sell among other distributors.
Cummings' inquiry into the system could lead to price-gouging legislation or other laws to ensure that the product is safe, legally obtained and available.
"Price gouging for drugs that treat cancer in children is simply unconscionable," Cummings said in a statement. "We want to know where these companies are getting these drugs and how much they are making in profits. Obtaining this information will help us develop concrete solutions."
Cytarabine, a chemotherapy drug commonly prescribed for many types of cancer, has been in short supply for about a year, according to the Leukemia and Lymphoma Society. The FDA reports that its three manufacturers blame production delays and high demand.
Cummings wrote to cytarabine distributor Miami-based Allied Medical Supply's chief executive Anthony Minnuto: "Although it is possible that you have higher labor and equipment costs than other distributors, it is difficult to understand why your company would charge over $990 a vial when the normal contract price for the drugs is approximately $12 a vial."
Four other companies got similar letters about some of their products, which are being sold for 20 to 50 times their normal sale prices, according to documents provided to Cummings' office by potential buyers.
One of the companies, Rockville-based Premium Rx National LLC, said it is reviewing the request.
"We intend to make a timely response to this inquiry. As a general rule, we believe secondary wholesalers play an important role in helping health care providers locate needed products during manufacturing shortages," Brian Greenwald, the company's president, said in an email statement.
Dan Herlihy, owner of Columbia-based Premium Health Services, said he would meet with Cummings' staff Wednesday and invited the congressman to tour his family-owned small business. He said he plans to fully cooperate with the investigation and supports a federal "pedigree" law, which would require documentation of a drug's chain of control.
"I look forward to meeting Congressman Cummings to highlight the inefficiencies that have led to the shortages we are facing," Herlihy said in an email statement.
The three other companies did not return calls by The Baltimore Sun seeking comment. If the companies don't respond to Cummings, he could seek to have the information subpoenaed.
Other members of Congress and regulators are also working to address the shortages, which have tripled in the last six years to 178 in 2010 from 61 in 2005, according to the FDA.
Sen. Amy Klobuchar, a Minnesota Democrat, introduced the Preserving Access to Life-Saving Medications Act that would require drugmakers to notify the FDA if they expect a shortage. The FDA would also have to say how it would address shortages and more quickly reinspect plants cited by the agency for quality-control problems.
FDA officials say they are working to import some drugs and get some manufacturing plants back on line faster after they fail safety inspections. But they say bigger problems stem from industry consolidation and discontinuation of less profitable generic drugs.
Manufacturers have blamed other factors, including natural disasters, raw materials shortages and changes in contracts with hospitals and pharmacies, as well as medicine they discontinue. Maintaining sterility during the manufacturing of injectable drugs can be particularly difficult, industry officials said.
Officials at the Pharmaceutical Research and Manufacturers of America, or PhRMA, say they are working with the government, suppliers and providers on the issue.
"Regardless of the cause, in order to provide patients with uninterrupted access to medicines, it is important for all of us who provide life-saving medications to work collaboratively to minimize unexpected disruptions in the supply of vital medicines," said PhRMA Deputy Vice President Karl Uhlendorf in a statement.
The drug shortages mean U.S. hospitals spend at least $200 million, or 11 percent, more a year on substitutes, according to a study by the Premier Inc., an information provider and purchasing agent for hospitals. It reported that in the second half of 2010, more than 240 drugs were in short supply or unavailable and more than 400 generic drugs were on back order for five or more days.
In 2011, there could be more than 360 drugs in short supply throughout the year, Premier reports. Officials said that means hospitals will not be able to get lifesaving drugs and may postpone procedures or substitute less effective drugs. They also warned about drug-related mistakes.
A Premier report on the gray market found in a short survey of hospitals earlier this year that 18 distributors offered 1,745 drugs to 42 hospitals, all on back order or unavailable from manufacturers. The average markup was 650 percent, but some drugs were marked up as high as 4,533 percent. Cytarabine was offered at an average 3,980 percent above market.
The report says most gray market companies are legitimate, but in some cases the drugs could be counterfeit, diluted or not stored properly to maintain efficacy.
Some states, including Maryland, have pedigree laws, and report authors say buyers should also inspect the drugs and check the National Boards of Pharmacy to ensure the distributor is accredited. (Three of the five companies Cummings has requested information from do not appear on the boards' list of accredited companies.)
Maryland's law was passed in 2007, and 807 distributors are licensed in the state. They must post bonds and representatives must submit to criminal background checks, which makes the law more stringent than those of other states, according to Anna Jeffers, legislation and regulation manager for the Maryland Board of Pharmacy.
Maryland will be among the first few states to require electronic tracing of drugs in 2016.
But Frese says the prices and safety remain an issue nationwide, and she's pleased her letter writing has turned into an investigation.
Her son is currently cancer free, though he'll need to be on medications for at least two more years. She said it's scary to think that manufacturers could stop making such lifesaving drugs, that hospitals could be priced out or that some drugs may not be safe.
It's also something she said parents of kids in treatment shouldn't have to worry about.
"For my husband and me, this is personal," she said. "To think of all the families we've met, and who have touched our hearts and whose kids are in worse condition, missing the type of drugs that could save their lives is tragic. How could something like this be allowed to happen?"
Cummings has alleged that these companies have excessively marked up drugs in short supply, and is requesting information from them:
•Allied Medical Supply Inc., offered cytarabine, used to treat leukemia, for over $990 per vial, more than 80 times a typical contract price of about $12 per vial.
•Superior Medical Supply Inc., offered paclitaxel, which is used to treat breast and ovarian cancer, for over $500 per vial, more than seven times a typical contract price of approximately $65 per vial.
•Premium Health Services Inc., offered leucovorin, which is used in combination with the chemotherapy drug fluorouracil to treat advanced colon cancer, for over $270 per vial, more than 50 times a typical contract price of approximately $5 per vial.
•Premium Rx National LLC, offered fluorouracil, which is used to treat colon, stomach, breast, and pancreatic cancer, for over $350 per vial, more than 23 times a typical contract price of approximately $15 per vial.
•Reliance Wholesale Inc., offered magnesium sulfate, which is used to control life-threatening seizures in pregnant women and to treat magnesium deficiency in patients who receive intravenous feeding, for over $400 for 25 vials, more than 40 times a typical contract price of approximately $9 for 25 vials.
Sources: Cummings, National Boards of Pharmacy
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