Obama Administration Takes Action to Reduce Prescription Drug Shortages & Price Gouging

While the Food and Drug Administration has successfully prevented 137 drug shortages since the beginning of 2010, drug shortages have been increasing in frequency and severity in recent years and adversely affecting patient care. A small number of drugs in the U.S. experience a shortage in any given year, but the number of reported prescription drug shortages in the United States nearly tripled between 2005 and 2010, going from 61 to 178. There are many causes and potential solutions to this challenge and addressing this significant public health problem will require the urgent attention of industry, other stakeholders, and government.

Today, President Obama will issue an Executive Order directing the FDA and Department of Justice to take action to help further reduce and prevent drug shortages, protect consumers, and prevent price gouging. These additional steps for early notification will help achieve some of the goals of bipartisan legislation in Congress, which the President supports, that will strengthen the FDA’s ability to prevent prescription drug shortages in the future.

The Executive Order is one in a series of steps that will help address the shortage of prescription drugs and ensure patients have access to the lifesaving medicines they need. Today, the Obama Administration will also:

Send a letter to drug manufacturers reminding them of their legal responsibility to report the discontinuation of certain drugs to the FDA. The letter also encourages companies to voluntarily notify FDA about potential prescription drug shortages in cases where notification is not currently required.
Increase staffing resources for the FDA’s Drug Shortages Program to address the increased workload that will result from additional early notification of potential shortages by manufacturers.
Release a report from the Department of Health and Human Services Office of the Assistant Secretary for Planning and Evaluation (ASPE) that assesses the underlying factors that lead to drug shortages, and an FDA report on its role in monitoring, preventing, and responding to these shortages....

Here's the price gauging part I really like:
Fighting Price Gouging
The President’s Executive Order also directs FDA to work with the Department of Justice to examine whether any secondary drug wholesalers or other market participants have responded to potential drug shortages by illegally hoarding medications or raising prices to gouge consumers. For example, the ranking member of the House Committee on Oversight and Government Reforms, when announcing his investigation into so-called gray markets, expressed concerns about a report that a leukemia drug whose typical contract price is about $12 per vial was being sold at $990 per vial – 80 times higher. A Premier healthcare alliance report released in August estimated that the typical gray market vendor marks up prices by an averaged 650 percent. At the extreme, a drug used to treat high blood pressure that was normally priced at $25.90 was being sold at $1,200 due to a shortage.



More at:
http://www.whitehouse.gov/the-press-office/2011/10/31/fact-sheet-obama-administration-takes-action-reduce-prescription-drug-sh