On one chemical website, for example, after adding the items to our online shopping cart, we clicked on the check-out button. Checking out was also remarkably similar to most name-brand vendors’ websites. Through our multiple exchanges, we were also able to ascertain that they were willing to entertain all kinds of requests, including bulk orders exceeding 25 kilograms of precursor chemicals for the production of fentanyl. TGC-RC Chemicals, for example, offered the option to ship their product to multiple addresses for an extra fee.
Gray Market Report
On average, the prescription drugs examined in this investigation were owned by three to four different gray market businesses before being sold to a hospital; most of the drugs traveled through the gray market in five days or less. Documents obtained during the investigation demonstrate that drug wholesalers often charge exorbitant prices to health care providers for drugs facing critical national shortages that are used to treat cancer and other life-threatening illnesses. 'Bad operators can enter the market'The gray-market vendors are part of the so-called “parallel market,” in which drugs are sold outside authorized channels. During a two-week period earlier this year, 42 of Premier’s acute care hospitals reported receiving 1,745 unsolicited offers from drug suppliers proffering vital medications that are in short supply. Amid growing shortages of life-saving drugs, some back-door suppliers are capitalizing on the problem, jacking up prices for medications for cancer, high blood pressure and other serious problems by as much as 4,500 percent, a new hospital survey shows. Many pharmacies market their products ambiguously or rely on offshore suppliers of raw ingredients.
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There may be health and safety concerns. Gray market fraud may also be used to facilitate other crimes, such as kickbacks and bribery, tax evasion and money laundering. In recent years, high-tech companies such as Cisco, HP and Microsoft have successfully referred cases of discount fraud to U.S. federal authorities for investigation and prosecution. When companies experience repeated major losses, they may seek criminal charges or pursue civil remedies, but these are difficult cases to prosecute. As companies develop brand protection units to detect and investigate discount fraud, the schemes have evolved into more complex and elaborate cases of fraud.
The Ozempic that CNBC purchased is considered an illegally diverted drug. The drug packaging, which appeared authentic, featured Chinese writing and the Novo Nordisk logo. The drug CNBC purchased was shipped via DHL from an office building in Shijiazhuang, China, about a four-hour drive from Beijing. The operations mainly involve phony or illegal versions of Novo Nordisk's diabetes drug Ozempic and its obesity drug Wegovy as well as Eli Lilly's Mounjaro and Zepbound.
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After a December warning to Summit Research Peptides, the company still sells tirzepatide and semaglutide peptides but no longer includes health claims on its website. The FDA has already issued warning letters to several online vendors. Selling these drugs under the guise of research is a huge loophole “that the FDA really needs to fill,” White says. Just Googling how to buy these drugs without a prescription brought up ads on his and his colleagues’ Facebook and Instagram feeds.
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While regulated, these compounded drugs aren't FDA-approved, raising concerns from doctors about variations in quality. Since brand name GLP-1 drugs have long been in shortage, drug compounders are legally allowed to fill the gap in demand with their own versions of the same active ingredients, semaglutide or tirzepatide. Research suggests that people who lose weight on GLP-1 medications need to continue taking them or they'll regain the weight so Rothenhoefer needed a long-term plan just to keep her weight stable. Rothenhoefer had been testing a drug, sold by pharmaceutical company Eli Lilly, which later won FDA approval for weight loss in 2023 under the brand name Zepbound.
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- Finally, she says, “I said the hell with this.” Her daughter told her about GLP-1 drugs, and Melanie ordered compounded tirzepatide from an online telehealth company.
- They swap advice for navigating the market, exchanging information on vendors, shipping and dosage, and sometimes clubbing together to cover the cost of testing the powders.
- Another respondent said a gray market vendor told him they watch the wholesaler’s supply, and if they sense an impending shortage, they buy the entire supply.
- Buyers must rely on themselves to reconstitute and inject these drugs, without physician guidance.
- In July 2011, the US Food and Drug Administration proposed rules that only require wholesalers to document a drug’s pedigree back to its last authorized distributor, not all the way back to the manufacturer.
He remembers one case in which the pedigree for a batch cancer medication was provided but it was still unclear whether the drug was safe, he said. In 2009, the FDA reported several cases in which diabetic patients complained that their insulin wasn’t working. But even more importantly, “it’s creating safety challenges for a physician trying to ensure a patient is going to get the right drug, at the right time and that it’s safe,” he said. A full 96 percent were at least double the normal price, while 45 percent were 10 times more expensive and 27 percent were 20 times more. After that, medication can be traded between distributors, sometimes traveling back from these smaller distributors and pharmacies to major wholesalers through sales or returns, according to a recent report from the Pew Health Group. It only happens when the manufacturer has already told us there’s none in the supply chain, and we’ve turned to as many other sources as we possibly can,” O’Neal said.
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Compounded drugs, though legal, are not FDA-approved. As of February 28, the FDA has received nearly 800 reports of adverse events linked to compounded semaglutide or tirzepatide. But about 75 percent were due to unintentional therapeutic errors, meaning people used the wrong dose or otherwise administered the drug incorrectly.
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Hard-to-make sterile injectables such as anesthesias and chemotherapies are particularly hard hit."More than 80 percent of all affected drugs were generic injectable medications, meaning drugs without patent protection that generally treat acute disease. In fact, half of the generic injectable drugs sold in the United States were on the shortages list, according to a November report by the IMS Institute for Healthcare Informatics.The AHA survey confirmed the extent of the problem with "82% of hospitals reporting they have delayed patient treatment as a result of a drug shortage, and more than half were not always able to provide the patient with the recommended treatment. In the first six months of 2011, some 99.5 percent of hospitals reported at least one drug shortage, according to a June American Hospital Association (AHA) survey; 44 percent fell short on more than 20 drugs, and 78 percent rationed supply.For example, Karen McBride, director of Pharmacy Services for Fletcher Allen Health Care, a university-affilliated Vermont hospital, says she has to scrounge drugs from other facilities and beg emergency rations from manufacturers. On August 17 the agency banned importation of some BVL drugs for "quality deficiencies" and what Health Canada spokesperson Olivia Caron calls "shortcomings in the Good Manufacturing Practices including product sterilization and quality oversight."BVL spokesperson Jason Kutz said that concluding there was a link between the Canadian ban and quality issues was "inaccurate and misleading."But within days of the Canadian action on August 17, and also facing restrictions on its products in Europe, BVL announced it was quitting contract-manufacturing. He says ER doctors have seen patients with complications from taking either gray market or compounded obesity medicines, but they don't always say which.
" offered the pharmacies "service that will amaze you." The email concluded, without a hint of irony, "HAVE A JOY FILLED DAY!!!! The major teaching institution still hadn't been able to buy any Doxil and was canceling her rescheduled appointment.Relying on Sub-ContractorsThere are been multiple reasons for drug shortages. They also keep track of supply and demand – not unlike commodity traders – and then take advantage of any changes to make quick profits."I drove home with no treatment. I was in shock," said Eardensohn, 59, a warm and resolutely optimistic mother of two. Ondis Eardensohn discovered a new and growing drug crisis first hand. And that's probably the biggest thing that I've seen, is when patients take these, is that it does nothing.
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High prices could drive people to seek out more affordable versions from less-than-reputable sources. But just because a drug is off the list doesn’t mean supply is guaranteed. By May, pharmacies will no longer be able to dispense compounded versions, though that depends on ongoing litigation. In February, the FDA removed semaglutide from the drug shortage list.
Hospitals and health care providers say they are being strangled by extraordinary markups for vital drugs. Now the aggressive spread of this pharmaceutical grey market has rung alarm bells in Congress and cast light on outdated drug-supply laws. This trade group represents the secondary drug distributors often accused of constituting the gray market pipeline. In some cases, the price of those nine drugs exceeded 35 times the normal pricing. Moreover, California’s first electronic pedigree (e-Pedigree) law in 2004 made it illegal for pharmacies to sell more than a nominal quantity of drugs to a wholesaler.
He covers the Food and Drug Administration, with a special focus on Covid vaccines, prescription drug pricing and health care. The increases apply to the cancer drugs when they aren’t purchased from regular suppliers. An earlier version of this article stated that three-quarters of Premier’s hospital and health system clients have seen price increases of 40% to 75% for cisplatin and carboplatin. Other patients may not be so lucky, and may have to go to extreme lengths to get their medications.
The legality of gray market goods is variable depending upon the laws of a given country or region, but in the U.S., the sale of these goods is generally considered to be legal. This network is typically comprised of partners selected and vetted by the manufacturer and often bound by contracts regarding the distribution and sale of products. In this global marketplace, we are bombarded with product and service offers that provide almost unlimited purchasing opportunities for businesses, governments and other consumers. This may cause adverse reactions in patients, and medications can lose potency.
