Remember way back in 1987 when that mythical baron robber Gordon Gekko captivated us with his chilling speech about greed?

"Greed, for lack of a better word, is good. Greed is right. Greed works," Gekko said during one the most memorable movie scenes of the past 30 years.

For Gekko, greed resulted in a long jail sentence and a shot at redemption in 2010. Today, in the real world, greed is putting millions of patients in harm's way and hospitals in a very precarious position. It seems that some nefarious drug suppliers think that now is a good time to take advantage of desperate hospital pharmacy managers. As you likely know, we are in the midst of a tremendous drug shortage — some say it is the worst in 30 years. Everything from life-saving cancer drugs to critical anesthesia medications are in short supply and hot demand. An AHA survey released last month revealed that 99.5 percent of hospitals experienced one or more drug shortages in the last six months. So, capitalism being capitalism, there's been a rise in so-called gray marketers peddling their wares to hospitals nationwide.

An analysis released yesterday by Premier found that on average, drugs are being marked up 650 percent by gray market suppliers. That's not a typo — 650 percent! In the past, mark ups would range between 100-200 percent. Looking at 10 manufacturer back-ordered drugs, Premier found that the highest mark up was 4,533 percent for labetalol. The blood pressure medication usually sells for $25.90. Gray marketers are shopping it for $1,200. Propofol, which is used to sedate patients, has seen a 3,161 percent mark up; sodium chloride concentrate is up 2,350 percent.

"The gray market, also known as a parallel market, is a supply channel that is unofficial, unauthorized or unintended by the original manufacturer. In markets where the products are scarce or in short supply, gray markets may evolve to sell the item at any price the market will bear. In other circumstances, when commodities are already being sold at high margins, a gray market may develop to compete with the innovator's product, but at a lower price," the Premier report noted. "Often, in a shortage situation, gray market vendors offer to sell shortage products, typically at exorbitant prices. Capitalizing on the desperation of pharmacy directors and buyers who are finding it increasingly difficult to secure a sufficient supply of the drugs needed to meet all of their patient care needs, these profiteers may be the only available source of supply."

Bona Benjamin, director of Medication-Use Quality Improvement and coordinator of the Drug Shortages Web Resource Center at the American Society of Health System Pharmacists, said that shady vendors closely monitor ASHP's drug shortage website and get their marketing materials ramped up the minute a drug appears on the list.
Perhaps more concerning than the high prices though, is the quality and safety of gray market products. "Where and how are gray marketers getting the medications that no one else can? What's the integrity of the product?" Mike Alkire, chief operating officer of Premier, said during a press call. He said that gray market vendors often get the drugs on the black market and that on some occasions a drug can change hands four or five times in a day. That raises serious concerns about whether the medication was handled and stored properly.

Premier's simple advice to hospitals: don't buy products from gray market vendors, who often flood pharmacists with emails and faxes and, as Alkire put it, "hide in the shadows." But Alkire acknowledged that there are occasions when pharmacists have to go outside of the usual purchasing channels, especially in times of a shortage. That's why Premier developed a number of best practices that it's urging hospitals to follow if they have to buy from an alternate supplier.

On a regulatory front, Premier recommends that hospitals notify state authorities if they are approached by suspect suppliers. Alkire said 30 states have anti-price gouging laws on the books. At the federal level, Democratic senators Amy Klobuchar and Richard Blumenthal — both of whom spoke during the press call — are pushing legislation that would give FDA more authority to curb drug shortages. Blumenthal also noted that there will be a hearing September 21 on the hill and a GAO report on the drug shortage.