Role of attorneys general in combating the exploitation of prescription drug shortages and price gouging

The number of prescription drug shortages more than quadrupled between 2005 and 2011. According to a 2012 survey, 89% of hospitals reported experiencing shortages that had the potential to cause a medication safety issue or an error in patient care and 80% of hospitals experienced shortages that resulted in a patient care intervention delay or cancellation. Nevertheless, patients need drugs, and providers turn to “gray market” vendors that obtain drugs in short supply to resell them at increased prices. A 2011 report found that, on average, the gray market's markup of prescription drug prices was 650% and went as high as 4,533%. These price increases are directly passed on to consumers that cannot afford them. Moreover, the use of gray market vendors also calls into question the reliability of the source and handling of drugs because they operate outside the traditional supply chain. Therefore, gray market vendor price gouging and drug safety are inextricably linked. Despite some federal agencies' best efforts, some drug shortages will still occur and, with them, price gouging. Only a few states have legislation prohibiting prescription drug price gouging. Attorneys General could have a leading role in combating the exploitation of drug shortages that result in exorbitant prices consumers are ultimately forced to pay. I will review how each state addresses consumer protection act statutes aimed at combating prescription drug price gouging, analyze the results of the state survey and look at developing best practices nationally on how to combat prescription drug price gouging.