Congressman demands info from 'gray' drug marketer

AP News
Posted: Nov 02, 2011 6:19 PM
Congressman demands info from 'gray' drug marketer

A Maryland congressman for a second time is demanding a drug wholesaler answer questions about its handling of one of many lifesaving hospital drugs whose shortages have been disrupting patient care and leading to deaths.

Rep. Elijah Cummings, the ranking Democrat on the House Oversight and Government Reform Committee, has been probing alleged price-gouging by secondary suppliers accused of offering scarce drugs at huge markups.

Early last month, Cummings demanded information from several so-called "gray marketers" about where they were purchasing the drugs in short supply, what they were paying for them and how much they're charging hospitals.

Four companies have responded, and Cummings' staff is compiling their information.

However, one that's been in trouble with both state and federal authorities repeatedly, Superior Medical Supply Inc. of Superior, Colo., is not cooperating, Cummings' staff said Wednesday.

Superior initially agreed to cooperate, but has not provided requested documents and is no longer returning calls from Cummings' staff, according to a statement issued by the congressman.

Messages left at Superior's headquarters seeking comment were not returned Wednesday.

Superior has been in trouble three times since 2007, Cummings' staff noted:

_In 2008, the company paid $200,000 in civil penalties to settle charges by the Drug Enforcement Administration that it kept inaccurate and incomplete records on the receipt, delivery and sale of controlled substances distributed to its customers, on at least 58 occasions between January and September 2007. Superior also allegedly sold large quantities of hydrocodone _ the powerful narcotic pain killer that is the main ingredient in Vicodin and is one of the nation's most abused drugs _ to several pharmacies without reporting suspicious orders to the DEA, as required.

_In 2009, Superior was disciplined by the Colorado State Board of Pharmacy for buying prescription drugs from nine wholesalers located in other states and not registered to do business in Colorado. Superior was ordered to pay the state a $45,000 fine.

_Also in 2009, the California Attorney General's office alleged the company "purchased, traded, sold or transferred dangerous drugs that they knew, or reasonably should have known, were misbranded," according to documents in that case. It is still pending, a Cummings aide said.

In a letter sent to Superior CEO Mark Snyder Wednesday, Cummings repeated his Oct. 5 request that Superior explain how it was offering hospitals paclitaxel, a drug for breast and ovarian cancer that's in critically short supply, for more than $500 per vial when it normally sells for about $65 a vial. Cummings demanded that Superior provide multiple requested documents by Nov. 14.

The Associated Press reported in September that at least 15 deaths have been blamed on the worst-ever shortage of hospital drugs. Those deaths occurred because the right drug wasn't available, medical staff made dosing or other errors in administering unfamiliar alternative medications and, in a case resulting in nine deaths, a batch of IV liquid nutrition had to be made by hand and was accidentally contaminated.

Most of the drugs that are difficult or impossible for hospitals to acquire are widely used, generic injected medicines that normally are inexpensive because they've been around for years. The shortages mainly involve cancer drugs, pain medications, electrolytes used in liquid nutrition for critically ill patients and anesthetics used for surgery.

An August report by the hospital improvement group Premier Healthcare Alliance found the average markup of scarce drugs was 650 percent, but many markups were much higher. Two secondary distributors who have spoken with the AP said they don't get the huge discounts manufacturers give the country's three primary drug distributors, and by the time they get drugs their hospital clients need, they've already been marked up repeatedly.

On Monday, President Obama ordered the Food and Drug Administration to push more companies to notify it of potential shortages, speed applications to change production of those drugs, and alert the Justice Department about possible collusion or price-gouging.

Drug shortages have long been a problem for hospitals, but the number of new drug shortages each year has tripled since 2006. So far this year, more than 230 new shortages have been recorded by the University of Utah Drug Information Service, which tracks the shortages for hospital pharmacists around the country. That's a new record and exceeds the 211 new shortages reported last year.

Multiple factors are causing the shortages, from consolidation of generic manufacturers to serious quality problems forcing manufacturers to shut down production.