The definition of gray market is a supply of goods offered for sale that are “unofficial, unauthorized or unintended by the original manufacture.” When it’s applied to drugs, they are usually those that are in short supply.
Venders check the “short supply” list on the FDA site, then look for people selling the drugs. They buy up as much as they can, then offer it to pharmacies and hospitals at greatly increased rates. The average markup is 650%.
This is an area of dubious legality. In other gray market schemes, copyright infringements are being filed against these companies. At the moment, there don’t appear to be any specific laws against the practice, but there are prosecutable things happening.
In order to understand that, you need to know how a drug usually goes from manufacturer to the patient. The FDA is strict about this. The medication has to have what they call a pedigree; they have to show where that drug goes from the time it has been made until the time it has been dispensed. That’s hard to do under these circumstances.
This practice is literally killing people. Some of the drugs are for cancer patients, and if the hospitals don’t have them those patients could die. At other times, the medications haven’t been stored properly. A batch of insulin dispensed to diabetics didn’t control blood sugar levels. On testing, the drug had been stored improperly and couldn’t do the job effectively.
How the suppliers get the drugs is another thing to investigate. Some are legally purchased and the supplier is simply price gauging. Some are stolen. Some may even be fake. In many cases, they aren’t stored appropriately, which can cause degradation of the product.
The government is now stepping in, demanding answers of gray market companies. Representative Cummings of Maryland is launching an investigation, calling the practice criminal. The FBI is also getting involved now. Whether laws have been broken or need to be written will have to be decided, both in Congress and in court.
In the meantime, people are suffering and even dying from this process. As of September 23rd, 2011, 15 people have died from the shortages. Some have died while waiting for a source of the medication. However, others have died because the preparation and dosages were off.
Let’s hope that something gets done quickly to resolve this dangerous issue. None of us are safe from this practice.