Lawmakers allege some drug companies inflate cost of scarce drugs with 'fake pharmacies'

Rep. Elijah Cummings, D-Md., is leading a congressional investigation accusing some drug distributors of opening "fake pharmacies" to drive up the cost of some pharmacueticals that are in short supply.

The Wall Street Journal: Drug Resales Get Scrutiny
Some drug distributors are setting up fake pharmacies that allow them to obtain and then artificially raise the prices for cancer drugs and other medicines that are in short supply, according to letters written by lawmakers Wednesday. Lawmakers are looking into what they claim is a "gray market" for scarce prescription drugs that has emerged in recent months (Dooren, 3/21).

Reuters: Lawmakers Probe Pharmacy Ties To Price Gouging
Lawmakers are investigating three shadowy pharmacies in Maryland and North Carolina for diverting critical but scarce drugs from patients to wholesalers, who are then able to resell the medicine at sometimes big markups. Elijah Cummings, the senior Democrat on the House Committee on Oversight and Government Reform, began a probe in October to discover why certain companies were selling cancer drugs at more than a hundred times their normal cost (Yukhananov, 3/21).

The Baltimore Sun: Drug Company Deals Eyed In Probe Of Shortage
Congressional lawmakers investigating the shortage of lifesaving drugs used to treat cancer and other illnesses are looking into three companies in North Carolina and Maryland that they believe set up "fake pharmacies" to access the drugs that they then sold at a markup. The lawmakers, led by Rep. Elijah E. Cummings, a Baltimore Democrat, said Wednesday that they sent letters to the three pharmacies that they believe sold drugs to wholesalers that they also owned, which then sold the drugs on the "gray market" to entities that do not manufacture drugs or treat patients (Walker, 3/21).

The Associated Press: Lawmakers: Fake Pharmacies Price Gouging On Drugs
Members of Congress investigating shortages of crucial drugs are targeting nearly two dozen fake pharmacies allegedly set up solely to buy and resell the drugs at huge markups. Two senators and one U.S. representative on Wednesday sent letters to three individuals believed to have obtained licenses to operate both a pharmacy and a prescription drug wholesale business in a "shell game" -- to make money by taking advantage of the drug shortage crisis that's disrupting hospital and other patient care. The letters request detailed information by April 11 about the businesses and their purchases and resale of cancer and other lifesaving drugs (Johnson, 3/21).