INSTITUTIONAL PHARMACY EYED AS SOURCE FOR DIVERTED Rxs

House Criminal Justice SubcommitteeChairman Mark Souder (R, Ind) put theblame on institutional pharmacies forencouraging "gray market" transactionsin pharmaceuticals that may leaveAmericans vulnerable to dangerouscounterfeit drugs. During hearings on theissue in Washington, DC, Souder said that"‘own use'pharmacies' at nursinghomes or hospitals" are "primary sourcesfor diversion" of pharmaceuticals today.

By agreeing to provide medicationsolely to their own patients, these institutionalpharmacies are able to "acquiremedication at a price much lower thanwholesale," he said. "This opens the doorto fraud," as some hospital and nursinghome pharmacies obtain excess medicationby overstating their patient populations,and then sell the surplus "at a higherprice into the gray market." CitingWorld Health Organization estimates that10% of global pharmaceutical commercethis year will be counterfeit, Rep Soudersaid gray market diverters were responsiblefor spreading these counterfeits to USpharmacies.

According to the FDA, "drug diversionwas the entry point for every caseinvestigated by that agency involvingcounterfeit drugs going into legitimatepharmacies," Souder told Congress. Thiscreates "vulnerabilities that allow counterfeitor substandard drugs to end upin legitimate pharmacies" and could"expose this nation to devastating terroristattacks through our medicines," he said.