NCPA Testifies at Senate Hearing on Prescription Drug Gray Market

Share |

Alexandria, Va. - July 25, 2012 National Community Pharmacists Association (NCPA) Senior Vice President of Government Affairs, John Coster, PhD, RPh, testified at the U.S. Senate Commerce, Science and Transportation Committee hearing, "Short Supply Prescription Drugs: Shining a Light on the Gray Market". He cautioned that a balanced approach needs to be adopted in efforts to augment recently enacted legislation that helps address the prescription drug shortage problem, otherwise patient care could be inadvertently jeopardized.

"We urge Congress to not take actions that might limit the ability of pharmacies to take care of their patients," said Coster in his testimony. "The primary and secondary wholesaler markets both play an important role in ensuring that all patients have seamless access to virtually any product that they may require."

"Having said that, it is unethical for pharmacists to act as a conduit for the illegitimate gray market, which is contrary to the goal of providing the best patient care at the lowest cost. Problems or questionable practices should certainly be investigated and addressed, but any solution needs to be carefully tailored so that the pharmaceutical supply chain is not unduly disrupted and patients do not suffer due to shortages that may occur."

Prescription drug shortages have been most acute at hospitals with relation to injectable and infusion drugs. While independent community pharmacies obtain the overwhelming majority of their prescription drugs from large, primary wholesalers, they do use secondary wholesalers as alternatives to ensure their inventory remains properly stocked.

"Recently, there have been troubling reports of 'shell pharmacies' or 'paper pharmacies' that seem to have been established for the sole purpose of buying medications in short supply from primary wholesalers in order to sell them to seemingly unethical secondary wholesalers," Coster further testified. "No pharmacy should be in the business of acting as a conduit to facilitate the activities of an illegitimate gray market."

In mulling over what type of corrective actions should be taken to prevent this practice, Congress must strike the proper balance to prevent or deter any alleged acts of price gouging while preserving the ability of community pharmacies to manage their inventory, alleviate drug shortages and serve patients' needs. Coster offered the following recommendations:

  • Pharmacies should be allowed to continue returning outdated or short-dated products to wholesalers or distributors, or products that were sent to the pharmacy in error.
  • Pharmacies should also be allowed to continue selling pharmaceutical products to other pharmacies, because it helps to alleviate temporary shortages, especially in rural areas where daily wholesaler deliveries may be more sporadic.
  • Uniformly raise the bar for all entities engaged in this line of business and encourage all participants in the supply chain to perform the appropriate due diligence.

The National Community Pharmacists Association (NCPA®) represents the interests of America's community pharmacists, including the owners of more than 23,000 independent community pharmacies. Together they represent a $93 billion health care marketplace, dispense nearly 40% of all retail prescriptions, and employ more than 315,000 people, including 62,400 pharmacists. Independent community pharmacists are readily accessible medication experts who can help lower health care spending. They are committed to maximizing the appropriate use of lower-cost generic drugs and reducing the estimated $290 billion that is wasted annually by improper medication use. To learn more go to or read NCPA's blog, The Dose, at

Ask Your Family Pharmacist TM